-2v 


^^^^^^^^/ 

'  I  —  si- * 


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^c  <.  •  ..  , 


MESSAGES  and  DOCUMENTS 


OF 


J.  FRANK  HANLY 


GOVERNOR  OF  INDIANA 


January  9,  1905 — January  n,  1909 


INDIANAPOLIS  : 

WM.  \\.  BUBFORD,  CONTRACTOR  FOR  STATE  PRINTING  AND  BINDING 
1909 


J87 
I  fe 

|Cf; 


Messages  to  the  General  Assembly 


REGULAR  MESSAGES 


INAUGURAL  ADDRESS  TO  THE  SIXTY-FOURTH  GEN- 
ERAL ASSEMBLY. 


JANUARY  9,  1905. 

Gentlemen  of  the  Senate  and  House  of  Representatives: 

A  generously  partial  and  confiding  people  by  a  verdict  more 
nearly  approaching  unanimity  than  any  ever  before  rendered  by 
them,  have  confided  to  our  care,  for  a  time,  the  interests  of  the 
State,  in  so  far  as  government  agencies  can  affect  such  interests. 
Such  an  unexampled  and  unprecedented  expression  of  trust  and 
confidence  by  them  creates,  by  the  inexorable  law  of  compensation, 
obligation  for  us,  without  example  or  precedent.  Their  action 
rightly  and  accurately  understood  is  a  demand  for  the  strictest  pos- 
sible accounting  for  our  every  official  act — a  call  to  the  "better 
angels"  of  our  natures,  and  in  no  instance  is  it  to  be  construed  into 
license  to  follow  selfish  or  personal  purposes  either  of  our  own  or  of 
others.  Public  reasons  should  underlie  and  impel  every  public  act. 
That  much  the  people  demand.  Less  than  that  they  will  not  long 
abide. 

The  oath  of  office  which  I  have  just  taken  here  in  your  presence, 
in  the  presence  of  this  concourse  of  our  fellow  citizens,  and  in  the 
presence  of  Almighty  God,  like  unto  that  so  recently  taken  by  each 
of  you  in  your  respective  chambers,  is  a  most  solemn  and  binding 
obligation — one  well  calculated  to  impel  whoever  takes  it  to  high 
and  patriotic  service.  Cherishing  as  I  do  a  belief  in  the  existence 
of  a  just  God,  in  the  teachings  of  the  Christ,  and  in  the  immortality 
of  my  own  soul,  the  words  "so  help  me  God"  frame  the  most  sacred 
pledge  my  lips  can  utter  or  my  mind  conceive.  That  oath  now  lies 
upon  my  conscience,  and  there  it  shall  continue  until  the  commis- 
sion I  have  received  shall  be  returned  to  the  people  who  gave  it. 
If  I  fail,  and  in  some  things  I  may  fail,  not  one  of  my  countrymen, 
including  all  those  who  have  so  generously  trusted  me,  will  be  so 
deeply  grieved  as  I  myself  shall  be. 

I  congratulate  you  upon  the  happy  auspices  under  which  we 
begin  our  public  service.  We  are  assembled  under  conditions  of 

(5) 


— -'"•  V  V_-  6 

unsurpassed  material  wealth  and  prosperity.  Field,  mine  and  fac- 
tory have  yiefaed  rich  reward  to  the  efforts  and  industry  of  the 
wealth  producers  of  the  State.  Labor  is  employed  and  hopeful. 
Farmers  have  witnessed  a  steady  increase  in  values  and  in  the  ac- 
cumulation of  their  savings.  Merchants  have  enjoyed  a  growing 
and  profitable  trade.  Manufacturers  have  held  old  markets  arid 
have  gained  new  ones.  Transportation  companies  have  closed  a 
year  of  unequaled  profit,  and  the  banking  and  financial  institu- 
tions, both  state  and  national,  that  have  to  do  with  the  savings  and 
investments  of  the  people,  are  upon  sound  and  satisfactory  footing. 
There  have  been  few  failures  within  the  lines  of  legitimate  busi- 
ness. Mismanagement  and  speculation  in  some  instances  have 
brought  disaster.  Some  private  banking  institutions,  for  the  su- 
pervision of  which  there  has  been  in  the  law  no  adequate  provision, 
and  a  few  national  banks  have  closed  their  doors,  but  none  of  these 
have  substantially  affected  general  business  or  financial  interests. 

KEEPING  INSTITUTIONS   OUT   OF   POLITICS. 

Usually  fortunate  in  the  administration  of  State  affairs,  we 
have  been  especially  so  during  the  last  twelve  years.  In  that  time 
there  has  been  no  malfeasance  in  any  public  office  of  the  State. 
Governor  Matthews  set  a  high  standard  of  executive  efficiency  and 
excellence,  and  the  late  Governor  Mount  raised  that  standard  yet 
higher  and  inaugurated  many  wise  and  improved  business  methods 
in  the  handling  and  expenditure  of  the  public  revenues.  Today 
Governor  Durbin  goes  out  of  office  after  four  years  of  executive 
service  unexcelled  by  either  of  his  immediate  predecessors.  He 
carries  with  him  into  private  life  the  good-will  and  kind  wishes  of 
our  best  citizenship,  and  he  may  justly  feel  that  he  has  earned  the 
confidence  and  the  gratitude  of  his  countrymen. 

During  his  administration  the  public  debt  has  been  rapidly  de- 
creased and  the  annual  interest  charge  materially  lessened.  Hon- 
esty and  economy  have  characterized  every  department  of  the  gov- 
ernment. The  correctional,  penal,  benevolent  and  charitable  insti- 
tutions of  the  State  have  received  from  him  considerate  care  and 
efficient  management.  These  institutions  have  been  placed  upon  a 
plane  far  above  partisan  politics,  and  there  this  administration  in- 
tends to  keep  them.  There  shall  be  no  backward  step.  Above  all 
personal  and  party  obligations,  however  sacred  and  binding  they 
may  be,  I  hold  the  good  of  the  State  and  the  welfare  of  its  unfor- 
tunate wards.  There  shall  be  no  removals  of  persons  holding  posi- 
tions in  any  of  such  institutions  except  for  the  good  of  the  institu- 


tions  themselves.  Upright  and  efficient  service  will  guarantee  con- 
tinued tenure  of  position.  Negligent  and  incompetent  service  will 
insure  immediate  removal. 

STRICT  BUT  SANE  ECONOMY  AT  INSTITUTIONS. 

The  policy  of  the  administration  in  regard  to  the  institutions  of 
the  State  shall  involve  strict  but  sane  economy.  Value  received 
shall  be  required  for  money  expended.  Necessary  improvements 
will  be  insisted  upon.  Needed  repairs  will  be  made.  To  refuse 
actual  needs  is  not  economy,  but  extravagance.  This  applies  to  the 
educational  institutions  with  the  same  force  that  it  does  to  the  other 
institutions.  In  the  days  of  hardship  and  privation  our  fathers 
established  these  schools.  Shall  we,  their  children,  in  our  day  of 
ease  and  plenty,  refuse  to  provide  for  their  needs  or  let  them 
languish  or  deteriorate  for  want  of  means?  Not  so.  Having 
established  and  maintained  them  until  their  usefulness  has  been 
successfully  demonstrated  and  their  fame  has  spread  over  the  land 
to  such  an  extent  as  to  fill  them  to  overflowing  with  an  eager  and 
virile  student  life,  we  can  not  abandon  them  now,  and  to  refuse  to 
recognize  or  provide  for  their  necessities  is  a  step  toward  abandon- 
ment. I  do  not  believe  we  intend  to  take  that  step.  And  I  there- 
fore urge  full  and  careful  consideration  of  their  wants  to  the  end 
that  their  capacity,  equipment  and  facilities  shall  correspond  to  the 
growth  and  development  of  the  State,  and  shall  equal  at  all  times 
the  demands  made  upon  them. 

TUBERCULOSIS  INSTITUTE  COMMISSION  ADVISED. 

The  proposition  to  establish  a  State  hospital  for  the  scientific 
treatment  of  tuberculosis  promises  so  much  in  the  way  of  the  im- 
provement, the  cure  and  the  prevention  of  that  dread  disease  as  to 
deserve  serious  consideration.  Experiments  in  New  York,  Rhode 
Island  and  Massachusetts  have  demonstrated  the  value  of  such  an 
institution,  and  have  turned  the  best  thought  of  our  own  people  to 
the  consideration  of  our  duty  in  that  behalf.  In  1903  one  death 
out  of  every  four  that  occurred  in  the  State  from  preventive  causes 
was  due  to  consumption.  Deaths  from  that  cause  that  year  num- 
bered 4,876,  and  for  the  year  just  closed  deaths  from  such  cause 
have  not  been  fewer  in  number.  There  is  high  authority  for  the 
statement  that  scientific  treatment  under  the  favorable  conditions 
to  be  secured  in  a  State  hospital  will  save  to  useful  lives  49  per  cent, 
of  the  persons  treated,  and  bring  improvement  to  43  per  cent,  of 
the  others.  Such  a  work  appeals  to  every  humanitarian  impulse  of 


8 

our  people.  The  condition  of  the  finances,  however,  is  such  as  to 
preclude  an  appropriation  by  you  for  the  immediate  establishment 
of  such  an  institution.  But  something  can  be  done.  An  initial 
step  can  at  least  be  taken.  I  recommend  that  a  commission  be  cre- 
ated composed  of  five  members,  one  of  whom  shall  be  a  member  of 
the  Senate,  two  of  whom  shall  be  members  of  the  House,  and  two 
of  whom  shall  be  practicing  physicians  of  the  State.  Such  com- 
mission should  be  invested  with  authority  to  investigate  the  subject 
and  report  the  results  of  its  investigation,  together  with  such  recom- 
mendations as  it  shall  deem  wise,  to  the  next  General  Assembly  for 
its  consideration. 

ADDITIONAL   HOSPITAL   FOR   INSANE   ADVOCATED. 

The  institutions  for  the  insane  have  become  inadequate  to  house 
this  most  unfortunate  class  of  our  population.  They  arc  daily 
refused  admission  to  such  institutions  because  of  sheer  lack  of  room 
to  receive  and  care  for  them,  and  arc,  therefore,  remanded  either 
to  the  care  of  their  own  friends,  or  to  the  poorhouses  and  jails 
of  the  several  counties,  where  they  remain  without  proper  care  or 
treatment,  a  charge  upon  the  county  in  which  they  live.  Under 
such  conditions  the  question  of  cure,  or  even  of  improvement,  is 
practically  eliminated  from  the  problem.  Irremedial  and  hopeless 
insanity  is  often  the  result,  when  under  humane  surroundings  and 
rational  scientific  treatment,  improvement  or  even  recovery  might 
be  assured.  Left  in  the  poorhouses  and  the  jails,  without  medical 
treatment  or  intelligent  care,  many  of  them  become  permanent 
charges  upon  the  public,  when  a  short  term  in  a  State  institution 
would  effect  a  cure  and  enable  them  to  return  to  their  families  and 
become  self-supporting — an  asset  to  the  State  instead  of  a  liability. 
There  are  said  to  be  226  of  such  unfortunates  in  the  State  who 
have  been  committed  upon  inquisition  to  the  hospitals  for  the  in- 
sane, but  who  have  not  been  received  for  lack  of  room,  and  434  more 
who  are  proper  subjects  for  inquisition  and  treatment. 

In  view  of  these  conditions  there  can  scarcely  be  dispute  or  de- 
bate as  to  the  duty  of  the  State.  Its  obligation  is  plain  and  im- 
perative. A  new  hospital  should  be  constructed.  The  people 
can  act  only  through  you,  their  chosen  representatives.  It  is  for 
you  to  say  whether  this  condition  shall  continue.  I  can  only  sug- 
gest, but  you  can  act.  In  behalf  of  the  660  neglected  ones  who 
sit  in  mental  darkness  amid  unsanitary  conditions  and  unwholesome 
surroundings,  without  medical  or  humane  treatment,  and  without 
hope  in  the  hearts  of  the  friends  who  love  them,  I  appeal  to  you. 


And  lest  you  do  not  hear  the  appeal,  or  hearing,  you  forget,  I  beg 
you  to  remember  the  words  of  the  great  Teacher,  for  surely  He 
must  have  thought  of  such  unfortunate,  stricken  ones  as  these 
when  He  said:  "Inasmuch  as  ye  have  done  it  unto  one  of  the 
least  of  these,  my  brethren,  ye  have  done  it  unto  Me." 

It  has  been  suggested,  and  with  some  reason,  that  additions  to 
existing  hospitals  should  be  built,  rather  than  to  enter  upon  the 
construction  of  a  new  one.  The  basis  for  such  contention  is  that 
it  will  cost  less  money  to  build  additions  and  afford  more  imme- 
diate relief.  I  am  still  of  the  opinion,  however,  that  it  will  be 
better  to  establish  a  new  hospital  than  to  undertake  to  build  such 
additions.  If  additions  be  built  to  the  present  institutions  it  will 
be  necessary,  at  least  in  one  instance  and  possibly  in  two,  to  en- 
large the  lighting  and  heating  plants  at  such  institutions.  The 
enlargement  of  such  institutions  until  they  will  have  sufficient 
capacity  to  care  for  a  thousand  patients  each,  will  only  meet 
present  necessities.  The  total  number  that  can  be  provided  for 
in  that  way  is  679.  There  are  practically  that  many  now  who 
ought  to  be  cared  for  by  the  State.  A  new  institution  will  not 
only  answer  present  demands,  but  it  will  provide  for  future  needs 
and  its  establishment  will  cost  but  little,  if  any  more,  than  the 
three  proposed  additions. 

NEED  OF  AN  EPILEPTIC   INSTITUTE. 

Closely  connected  with  the  question  of  an  additional  hospital 
for  the  insane  is  another  matter  of  equally  grave  importance — 
the  establishment  of  an  institution  for  epileptics.  Of  these  there 
are  said  to  be  381  who  are  in  the  hospitals  as  insane.  There  are 
many  others  in  the  jails  and  poorhouses,  and  still  others  at  large; 
in  all  920  who  ought  to  be  receiving  the  charity  of  the  State  in 
a  properly  appointed  institution.  A  number  of  States  have  estab- 
lished such  institutions.  In  Ohio,  New  York,  Massachusetts  and 
New  Jersey  epileptic  colonies  or  villages  have  been  in  successful 
operation  for  a  considerable  time,  varying  from  three  to  fourteen 
years.  In  such  States  the  matter  is  no  longer  an  experiment,  but 
has  become  a  part  of  the  established  policy  of  the  State.  The 
history  of  these  institutions  is  most  interesting.  Five  to  10  per 
cent,  of  all  patients  received  are  cured,  and  there  is  marked  im- 
provement in  many  others. 

Epilepsy  is  hereditary.  Competent  authorities  estimate  that 
one-third  of  those  afflicted  with  the  disease  have  inherited  it  and 
are  therefore  bearing  the  "blight  of  ancestral  sins  and  woes."  For 


10 

these  there  is  little  or  no  hope  of  recovery.  They  are  children  of 
the  State  in  the  fullest  possible  meaning  of  the  term.  In  two- 
thirds  of  the  cases,  however,  the  disease  is  said  to  be  due  to  other 
causes  than  heredity,  and  in  most  of  such  cases  there  is  hope  of  im- 
provement and  often  of  a  full  return  to  intellect  and  strength. 
The  nature  of  the  malady  is  such  that  those  who  are  afflicted  with 
it  must  be  denied  the  usual  privileges  of  schools,  entertainments, 
society  and  employment,  and  are  compelled  to  grow  up  into  adult 
life,  ignorant,  idle,  isolated  and  neglected.  Outdoor  life,  consistent 
diet,  scientific  and  skilled  treatment,  congenial  occupation  and  a 
sympathetic  companionship  which  lessens  the  sense  of  neglect  and 
isolation  that  weighs  so  heavily  upon  them  in  the  world  of  normal 
men,  are  essential  to  their  improvement  or  recovery.  These  can 
best  be  had  in  institutional  life.  A  village  or  farm  colony,  where 
its  inmates  may  find  opportunity  to  turn  to  useful  account  such 
faculties  as  have  not  yet  been  destroyed  or  impaired,  and  which  arc 
capable  of  development,  and  where  something  of  home  life  and  its 
sympathies  may  be  had  and  enjoyed,  affords  the  best  plan  for  such 
an  institution.  The  establishment  of  such  an  hospital  can  be  jus- 
tified also  on  economic  grounds. 

The  insane  and  the  epileptics  in  the  poorhouses  and  jails  of 
the  several  counties  are  already  public  charges,  and  unless  cared 
for  by  the  State,  are  destined  to  remain  so  indefinitely.  There, 
they  are  costing  from  40  to  50  cents  a  day  for  maintenance.  They 
can  be  maintained  in  a  State  institution  at  a  cost  of  from  17  to  20 
cents  a  day.  If  the  first  cost  of  such  an  establishment  be  elim- 
inated, State  care  is  much  more  economical,  considered  from  a 
money  standpoint  alone,  than  jail  or  infirmary  custody.  It  is  also 
more  humane  and  scientific,  and  it  precludes  the  epileptic  from  be- 
getting his  kind,  a  thing  of  incalculable  future  benefit  to  the  race. 

I  am  persuaded  that  the  time  has  come  in  Indiana  when  we 
ought  to  take  these  worthy  and  dependent  children  of  the  State 
out  of  the  poorhouses,  the  jails  and  asylums,  where  they  are  a 
burden  to  the  public  and  a  horror  to  themselves,  and  care  for 
them  in  a  State  institution  as  becomes  our  wealth  and  rank  among 
the  great  "States  of  the  Union.  The  first  appropriation  need  not 
be  large.  It  is  believed  that  $150,000  will  be  sufficient  to  purchase 
a  farm  and  start  the  institution.  To  this,  in  the  beginning,  there 
should  be  sent  only  that  class  of  epileptics  most  calculated  to  re- 
spond to  treatment  and  best  qualified  to  assist  in  the  work  of  the 
construction  and  improvement  of  the  institution. 

The  law  providing  for  the  establishment  of  an  additional  hos- 


11 

pital  for  the  insane,  or  of  an  epileptic  institute,  should  provide  for 
the  appointment  of  a  commission  of  not  less  than  five  persons 
to  select  and  purchase  sites  for  them,  under  such  restrictions  as 
to  cost,  area  and  location  as,  in  your  judgment,  shall  seem  wise. 

FINANCES    OF    THE    STATE. 

For  twelve  years  we  have  been  engaged  in  debt-paying.  The 
record  of  the  late  administration  in  that  regard  is  without  prece- 
dent in  the  history  of  the  State.  There  now  remains  but  $1,207,000 
of  the  bonded  foreign  debt ;  $407,000  of  that  sum  is  represented 
by  3  per  cent,  school  fund  refunding  bonds  of  the  issue  of  June, 
1889.  These  bonds  arc  payable  at  the  pleasure  of  the  State,  but 
will  not  be  due  until  June,  1909.  The  sinking  fund  tax  rate  of  3 
cents  on  the  $100  will  produce  this  year  a  fund  something  more 
than  sufficient  to  discharge  this  issue  of  bonds  in  full ;  $300,000  of 
the  bonded  foreign  debt  consists  of  3V>  per  cent,  funding  bonds 
of  the  temporary  loan  of  the  issue  of  April,  1895.  These  are 
payable  at  the  pleasure  of  the  State  after  April,  1910,  but  will 
not  be  due  until  April,  1915.  The  remaining  $500,000  of  such 
debt  consists  of  31/>  per  cent.  State  House  temporary  funding 
bonds  of  the  issue  of  May,  1895,  payable  at  the  option  of  the  State 
after  May,  1910,  but  not  due  until  May,  1915. 

The  present  sinking  fund  tax  rate  of  3  cents  on  the  $100 
produces  an  annual  sinking  fund  income  closely  approximating 
$450,000.  This  tax  should  be  reduced  to  a  rate  sufficient  only  in 
amount  to  meet  the  bonded  foreign  debt  when  the  same  becomes 
payable  in  1910.  More  than  that  is  not  needed  and  will  only  ac- 
cumulate as  idle  money  in  the  State  treasury  unless  we  go  into  the 
market  and  purchase  bonds  before  our  option  to  pay  matures,  a 
thing  Ave  ought  not  to  do,  to  the  extent  which  the  present  rate  will 
make  necessary  if  it  be  continued.  Indeed,  the  present  necessities 
of  the  State  which  can  be  met  only  out  of  the  general  fund,  are 
such  as  to  justify  us  in  reducing  the  sinking  fund  tax  rate  to  1 
cent  on  the  $100.  Such  a  rate  will  produce  something  like  $750,- 
000  by  1910,  or  within  $50,000  of  enough  to  redeem  the  entire 
bonded  foreign  debt  the  day  the  option  to  pay  it  matures,  and  five 
years  before  it  is  actually  due.  The  repeal  of  the  sinking  fund 
tax  in  its  entirety  has  been  suggested,  but  that  ought  not  to  be 
done.  Some  provision  should  be  left  for  the  payment  of  the  debt, 
and  it  should  be  sufficient  in  amount  to  meet  it  by  the  time  it  be- 
comes payable  under  the  terms  of  the  loan. 


12 


DEBT   PAYING  CAUSKS    EMBARRASSMENT. 

The  estimated  expenses  for  the  State  government  for  the  fiscal 
year  ending  October  31,  1905,  including  specific  appropriations 
now  available  and  the  estimated  cost  of  the  present  session  of  the 
General  Assembly,  arc  $463,000  in  excess  of  the  estimated  rev- 
enues accruing  to  the  State  within  such  fiscal  year.  This  condi- 
tion of  the  finances  will  become  an  actual  embarrassment  to  the 
treasury  before  the  end  of  the  current  year.  It  can  be  met  only 
by  borrowing  money  outright  or  by  anticipating  the  revenues  for 
the  next  fiscal  year.  It  is  due  to  two  causes.  First,  to  the  large 
appropriations  made  by  the  last  General  Assembly;  second,  to  a 
substantial  invasion  of  the  general  fund  for  the  purpose  of  making 
payments  on  the  State  debt.  The  sum  of  $140,379.45  has  been 
taken  out  of  the  general  fund  during  the  last  two  fiscal  years, 
$416,703.25  in  three  years  and  $521,091.59  in  four  years,  and 
applied  to  the  payment  of  the  State's  indebtedness  not  yet  due,  at 
a  time,  too,  when  the  general  fund  was  already  overdrawn,  and 
when  the  revenues  accruing  to  such  fund  were  being  anticipated  far 
in  advance.  Bonds  were  bought  in  the  market  with  money  from 
the  general  fund  in  the  face  of  the  fact  that  there  was  sure  to  be  a 
heavy  deficit  in  that  fund  at  the  close  of  each  fiscal  year.  Debt- 
paying  is  commendable,  but  the  present  embarrassment  could  have 
been  saved  by  conserving  the  general  fund  and  applying  only  the 
sinking  fund  to  the  payment  of  the  debt,  especially  so  as  such  fund 
would  have  been  ample  to  meet  the  entire  bonded  foreign  debt  long 
before  it  would  have  become  due.  The  revenues  for  the  present 
year  have  been  anticipated  to  the  extent  of  $529,649.03. 

The  estimated  revenues  accruing  to  the  general  fund  for  each 
of  the  years  1906  and  1907  from  the  present  levy,  such  estimate 
being  based  upon  last  year's  receipts,  will  be  $2,971,157,  or 
$5,942,314  for  the  two  years. 

The  regular  expenditures  for  the  administration  of  the  State 
government,  including  the  maintenance  of  the  several  State  insti- 
tutions, and  not  including  specific  appropriations  for  such  insti- 
tutions, based  upon  the  year  just  closed,  will  be  $2,364,630  for 
each  of  the  years  1906  and  1907,  or  $4,729,260  for  the  two  years. 
This  would  leave  a  balance  in  the  treasury  to  the  credit  of  the 
general  fund  of  $1,213,054,  from  which  specific  appropriations 
for  the  years  1906  and  1907  might  be  made  were  it  not  for  tin* 
fact  that  the  expenses  of  the  present  vear  will  exceed  the  revenues, 
as  heretofore  shown,  something  like  $463,000,  which  deficit  must  be 
supplied  either  by  borrowing  money  or  by  anticipating  the  rev- 


13 

enues  for  1906.  Deducting  the  deficit  of  '$463,000  from  the  bal- 
ance of  $1,213,054,  left  in  the  treasury  after  paying  the  regular 
estimated  expenses  of  the  two  years,  we  have  a  balance  of  $750,054 
from  which  specific  appropriations  can  be  made,  whereas  the  insti- 
tutions already  established  seem  to  be  actually  in  need  of  specific 
appropriations  for  the  two  years  of  $1,174,596,  or  $424,542  in 
excess  of  the  money  that  will  be  available  for  that  purpose. 

In  addition  to  the  needs  of  the  present  State  institutions,  there 
is  urgent  need,  as  before  suggested,  for  the  construction  of  an 
additional  hospital  for  the  insane,  and  for  which,  if  it  be  estab- 
lished, there  will  have  to  be  appropriated  not  less  than  $500,000 
for  the  two  years.  There  is  also  a  like  need  for  the  construction 
of  an  epileptic  institute,  for  which  not  less  than  $150,000  should 
be  appropriated. 

If  these  two  institutions  are  established  and  appropriations  made 
as  suggested,  and  we  make  the  provision  that  the  existing  State 
institutions  actually  require  and  make  good  the  deficiency  for  this 
year,  it  will  necessitate  specific  appropriations  for  the  two  years 
aggregating  $2,287,596,  or  $1,074,542  in  excess  of  the  estimated 
revenues  available  for  that  purpose  within  the  two  years. 

WOULD    USE    PART    OF    SINKING   FUND    LEVY. 

These  facts  make  it  apparent  that  we  must  either  fail  in  our 
present  responsibility  to  the  institutions  already  established  and 
refuse  to  construct  either  of  the  new  hospitals  suggested,  or  we 
must  provide  additional  sources  of  income  for  the  general  fund. 
After  much  thoughtful  consideration  I  am  persuaded  that  we 
ought  to  adopt  the  last  course,  rather  than  the  first,  and  I  there- 
fore recommend  that  the  sinking  fund  tax  rate  be  reduced  to  1 
cent;  that  the  2  cents  taken  off  of  that  rate  be  transferred  to  the 
levy  for  the  general  fund  and  that  the  tax  rate  for  the  general 
fund  be  increased  by  an  additional  levy  of  1%  cents  on  the  $100. 
The  2-cent  levy  transferred  from  the  sinking  fund  to  the  general 
fund  will  produce,  approximately,  $600,000  in  two  years,  and  the 
additional  levy  of  1%  cents  will  bring  into  the  treasury  substan- 
tially $450,000.  These  sums,  together  with  the  $1,213,054  re- 
maining to  the  credit  of  the  general  fund  after  the  payment  of  the 
regular  expenses  of  the  two  years,  will  aggregate  $2,263,054,  or 
within  $24,542  of  the  total  expenses  for  the"two  years,  with  exist- 
ing institutions  properly  cared  for  and  with  two  new  and  much 
needed  institutions  substantially  established  and  the  present  deficit 
made  good.  I  make  this  recommendation  with  unfeigned  reluct- 


14 

ance,  because  of  the  great  expenditures  involved  and  of  the  increase 
of  the  State  tax  levy  which  such  expenditures  make  imperative, 
but  I  have  been  able  to  devise  no  other  way,  as  satisfactory,  to 
meet  the  confessed  institutional  needs  of  the  State.  While  we 
have  been  debt-paying  at  an  unprecedented  rate  the  needs  of 
the  State's  institutions  have  been  multiplying  and  can  not  longer 
be  deferred.  It  will  be  better  to  meet  these  needs  now  frankly 
and  boldly  than  to  shirk  our  responsibility  by  refusing  to  recog- 
nize them  and  leaving  the  helpless  and  unfortunate  wards  of  the 
State  in  poorhouses  and  in  jails,  charges  upon  the  respective  coun- 
ties where  they  live.  A  rich  and  prosperous  people  will  respond 
generously  to  the  one  policy,  but  I  am  persuaded  that  they  would 
be  slow  to  forgive  the  adoption  of  the  other.  Nor  will  the  increased 
burden  long  continue.  The  1%  cents  added  to  the  general  levy 
may  be  removed  in  two  years,  and  in  six  years  the  remaining  1  cent 
sinking  fund  levy  may  also  be  removed,  for  at  the  end  of  that 
period  there  will  remain  no  bonded  debt  to  be  provided  for  or  paid. 
For  these  reasons  I  most  earnestly  recommend  the  adoption  of 
the  plan  herein  mentioned,  and  sincerely  hope  it  will  meet  with  your 
approval  upon  full  consideration  and  debate.  The  deed,  if  done, 
will  square  itself  with  the  years. 

PRISON    TRADE    SCHOOLS    AND    STATE    WORKHOUSES. 

An  act  of  the  General  Assembly,  approved  March  11,  1903, 
created  a  prison  commission  composed  of  the  warden  of  the  State 
Prison,  the  general  superintendent  of  the  Indiana  Reformatory,  the 
secretary  of  the  Board  of  State  Charities,  and  of  three  members  to 
be  appointed  by  the  Governor.  Under  that  act  the  commission  has 
been  organized,  and  its  members  have  given  much  time  to  the  in- 
vestigation of  the  questions  referred  to  them,  and  after  thoughtful 
consideration  they  have  submitted  certain  conclusions  to  you  in  the 
form  of  a  report,  which  I  understand  has  been  laid  before  you. 
That  report  should  challenge  your  attention  as  a  whole,  but  I 
respectfully  urge  upon  your  consideration  two  recommendations 
contained  therein.  The  first  is  the  suggestion  that  a  convicted 
prisoner  who  is  given  a  jail  sentence  is  the  prisoner  of  the  State, 
and  should  be  under  direct  State  control  in  some  institution  of  the 
State  where  he  can  be  employed  at  useful  labor,  instead  of  being 
confined  in  jail  and  kept  in  idleness  under  county  control. 

A  system  of  workhouses  under  State  control,  in  which  all 
male  prisoners  convicted  of  crime,  which  under  existing  law  is  made 
punishable  by  imprisonment  in  the  county  jail,  shall  be  confined,  is 


15 

proposed.  I  can  not  now  discuss  the  details  of  the  report  of  the 
commission  in  this  behalf,  but  I  am  impressed  with  the  belief  that 
the  suggestion  contains  the  practical  basis  of  a  much  needed  reform. 

The  second  recommendation  involves  the  abandonment  of  the 
contract  labor  system  in  the  State  Reformatory  and  the  employ- 
ment of  the  prisoners  there  in  a  school  of  letters,  in  trade  schools 
and  at  labor  on  State  account.  The  existing  labor  contracts  at  the 
Reformatory  will  expire  in  July,  1906,  and,  in  my  judgment,  ought 
not  to  be  renewed.  Some  employment  for  the  prisoners  of  the 
institution  must  of  necessity  be  provided,  and  it  should  be  of  a  char- 
acter that  will  affect  in  the  slightest  degree  possible  the  laboring 
and  producing  classes  of  the  State.  The  system  of  contract  labor 
now  in  force  compels  free  labor  to  compete  with  convict  labor  and 
forces  manufacturers  into  competition  with  prison-made  goods,  and 
fixes  and  establishes  prices  of  such  articles  in  a  damaging  measure. 

The  employment  of  prison  labor  on  such  account,  that  is  to  say, 
in  the  production  of  articles  to  be  sold  by  the  State  or  used  by  the 
State  in  its  various  institutions,  or  by  the  political  divisions  thereof, 
has  been  demonstrated  to  be  practical  and  of  all  methods  least  ob- 
jectionable to  free  labor  and  production  and  most  satisfactory  to  all 
the  people.  Such  method  of  employment,  together  with  trade 
schools  and  the  school  of  letters  recommended  by  the  commission,  is 
in  harmony  with  the  humane  principles  and  reformatory  methods 
already  adopted  and  in  use  by  the  State  in  the  care  and  treatment 
of  the  prisoners  under  its  control.  The  labor  contracts  at  the 
State  Prison  do  not  expire  until  October,  1910.  If  the  method 
recommended  by  the  commission  be  adopted  for  the  Reformatory  by 
the  present  General  Assembly  its  value  will  have  been  practically 
demonstrated  before  we  are  called  upon  to  meet  the  question  in  the 
State  Prison.  The  recommendation  represents  the  best  thought  of 
those  most  competent  to  advise  upon  this  most  important  subject 
and  deserves  your  highest  consideration. 

CONTINUANCE  OF  CODIFICATION  COMMISSION  ADVISED. 

Pursuant  to  the  provisions  of  an  act  of  the  General  Assembly 
approved  March  9,  1903,  a  commission  was  appointed  in  April  of 
that  year  to  prepare  a  compilation,  revision  and  codification  of  the 
-laws  of  the  State  concerning  public,  private  and  other  corporations, 
and  statutes  relating  to  highways  and  drainage,  and  such  other 
statute  laws  as  such  commission  should  deem  proper.  The  commis- 
sion has  prepared  a  report  which  is  already  before  you,  together 
with  several  bills  embodying  the  results  of  its  labors.  Its  report 


16 

covers  a  wide  field  and  includes  a  number  of  difficult  and  important 
subjects,  such  as  cities  and  towns,  drainage,  proceedings  in  the 
exercise  of  the  power  of  eminent  domain,  private  corporations,  high- 
ways, and  the  criminal  code.  The  report  and  the  bills  accompany- 
ing it  deserve  the  best  thought  of  each  of  you.  The  varied  and 
important  subjects  treated  affect  closely  many  interests  of  the  peo- 
ple and  the  corporations  of  the  State. 

Taken  as  a  whole,  the  work  of  the  commission,  as  presented  to 
you,  constitutes  the  most  important  legislation  likely  to  come  before 
you.  While  each  of  the  prepared  bills  should  be  scrutinized,  ana- 
lyzed and  debated  with  care  and  critical  intelligence,  the  skill,  learn- 
ing and  ability  of  the  members  of  the  commission  are  so  well  known 
and  their  work  has  been  done  with  such  zeal  and  intelligence  that 
I  commend  the  results  of  their  labors  to  you  with  full  confidence 
that  they  can,  in  the  main,  safely  be  accepted. 

The  life  of  the  commission  expires  by  limitation  of  the  law 
which  created  it,  with  the  adjournment  of  the  present  General  As- 
sembly. There  are  still  many  important  and  difficult  subjects 
affecting  many  vital  interests  that  have  not  as  yet  been  considered. 
Revision  is  greatly  needed  as  to  them.  In  fact,  the  work  of  the 
commission  will  not  be  complete,  or  the  purpose  of  the  law  creating 
it  obtained,  if  the  labors  of  the  commission  are  to  end  with  your 
adjournment.  A  knowledge  of  this  leads  me  to  the  conclusion  that 
the  life  of  the  commission  should  be  extended  for  a  period  of  two 
years,  to  end  with  the  adjournment  of  the  next  General  Assembly. 

The  whole  subject  is  of  such  imperative  moment  that  I  venture 
to  express  the  hope  that  you  will  not  fail  to  enact  the  several  bills 
submitted  after  such  amendment  and  alteration  as  upon  full  de- 
bate and  consideration  you  may  deem  wise,  and  that  you  will  not 
fail  to  continue  the  commission  as  suggested. 

STATE    SUPERVISION    OF    PRIVATE    BANKS. 

Sound  banking  institutions  are  absolutely  essential  to  stable 
financial,  commercial  or  industrial  conditions.  This  is  so  true  that 
years  are  required  for  a  community  to  recover  from  the  effects  of 
a  single  bank  failure.  The  losses  occasioned  by  such  failures  are 
not  confined  to  savings  alone.  These,  of  course,  are  swept  away, 
but  such  failures  are  always  attended  with  a  betrayal  of  trust  and 
of  confidence  that  does  far  more  to  injure  the  business  interests  of 
the  community  and  society  in  general  than  the  direct  money  loss 
sustained  can  possibly  accomplish.  Men  who  have  known  each 
other  for  years  and  who  have  had  full  confidence  in  each  other  sud- 


17 

denly  become  doubtful  and  suspicious,  with  a  resultant  disturbance 
of  business  and  commercial  affairs  and  the  embarrassment  of  other 
perfectly  solvent  and  safe  institutions. 

The  number  of  private  bank  failures  in  this  State  within  the  last 
year  constitutes  irrefragable  proof  of  the  need  of  legislation  which 
will  give  the  State  authority  to  inspect  and  supervise  every  private 
firm,  partnership  or  institution  engaged  in  any  manner  in  the  bank- 
ing business.  In  some  of  the  recent  failures  of  private  bankers  an 
investigation  of  their  affairs  made  after  assignment  has  disclosed 
the  most  flagrant  and  criminal  disregard  of  the  rights  of  their 
depositors.  In  some  instances  the  savings  of  patrons  of  the  bank 
have  been  checked  out  by  the  proprietors  within  twenty-four  hours 
after  they  were  deposited  and  by  them  converted  to  their  own  use. 
In  one  instance,  at  least,  this  was  done  to  an  extent  of  almost  $300,- 
000,  and  the  fact  of  such  malfeasance  concealed  and  covered  up  for 
years.  A  trusting  and  confiding  clientele  was  robbed  daily,  week 
after  week,  month  after  month  and  year  after  year,  in  the  most 
reckless  manner,  the  possibility  of  which  is  a  reproach  to  the  State. 

The  people  whose  earnings  have  been  embezzled  and  squan- 
dered, together  with  every  man  engaged  in  honest  private  banking, 
of  whom  there  are  many  in  the  State,  rightly  demand  relief  at  the 
hands  of  their  representatives.  The  question  should  be  taken  up 
with  considerate  care,  having  due  regard  for  the  interests  of  both 
the  private  banker  and  the  depositor. 

No  private  individual,  firm,  copartnership  or  institution  of  any 
kind  should  be  permitted  to  use  the  word  "bank"  in  connection  with 
its  business,  or  to  receive  the  deposits  of  the  people,  or  to  engage  in 
any  manner  in  the  business  of  banking,  without  first  setting  aside  a 
cash  sum  as  capital  to  be  maintained  unimpaired  so  long  as  such 
business  is  conducted.  The  sum  required  as  capital  I  submit  to 
your  intelligent  judgment,  but  it  should  be  adequate  in  amount, 
taking  into  consideration  the  character  of  the  community  in  which 
such  bank  is  located. 

There  should  also  be  an  inhibition  against  the  loaning  of  money, 
either  directly  or  indirectly,  to  any  person,  firm,  copartnership  or 
corporation,  either  as  principal  or  surety,  beyond  a  fixed  and  rea- 
sonable sum,  taking  into  consideration  the  amount  of  paid-up  capi- 
tal of  each  institution. 

In  connection  with  the  above  requirements  the  State  should  be 
given  full  power  of  inspection  and  supervision,  through  an  officer  to 
be  appointed  for  that  purpose,  and  such  officer  should  be  required 

[2—19891  ] 


18 

to  give  bond  and  should  be  held  liable  civilly  upon  such  bond  and 
be  subject  to  criminal  prosecution  for  the  neglect  of  his  duty  or  for 
malfeasance.  While  these  restrictions  will  not  prevent  bank  fail- 
ures, I  am  persuaded  that  they  will  go  far,  if  enacted  by  you, 
toward  minimizing  their  number  and  extent. 

URGENT    NEED    OF    STATE    RAILROAD    COMMISSION. 

Railroads  are  public  highways  and  the  business  of  operating 
them  is  a  public  business.  Their  existence  is  due  wholly  to  the 
fact  that  they  are  public  utilities.  When  they  cease  to  serve  the 
public,  the  reason  of  their  being  ceases.  Modern  conditions  make 
the  "transportation  tax"  a  most  potential  factor  in  the  commerce 
of  the  country.  It  affects  every  product  of  the  field,  shop  or  mine 
and  levies  tribute  on  both  producer  and  consumer.  Up  to  the  limit 
of  fairness  the  tax  can  be  justified;  beyond  that  it  cannot.  It  is 
possible  for  freight  rates  to  determine  not  only  where  business  shall 
be  done,  but  who  shall  do  it.  In  the  absence  of  legislation  those 
who  pay  the  tax  have  no  voice  whatever  in  determining  what  it 
shall  be.  The  carrier  arbitrarily  determines  that  for  itself.  Hav- 
ing power  to  make  freight  rates,  and  freight  rates  being  the  con- 
trolling factor  in  determining  where  and  by  whom  business  shall 
be  done,  the  carrier  becomes  the  master,  and  the  people  it  was 
created  to  serve  its  servants. 

That  the  common  law,  the  courts  and  their  remedies  are  inade- 
quate to  afford  any  practical  relief  as  between  the  shipper  and  the 
carrier,  or  even  between  carriers  themselves,  is  now  quite  generally 
conceded. 

That  the  competition  of  carriers,  markets  and  waterways  has 
ceased  to  be  a  sufficient  safeguard  against  the  evils  that  necessarily 
grow  out  of  and  accompany  the  country's  vast  transportation  busi- 
ness is  also  a  generally  accepted  truth. 

Neither  Congress  nor  the  General  Assembly  of  the  State  has 
time  to  investigate  and  fix  transportation  rates,  and  both  are  pre- 
cluded by  constitutional  limitations  from  conferring  legislative 
functions  upon  the  courts. 

Some  impartial  tribunal  to  act  as  arbiter  to  determine  questions 
as  to  rates  and  collateral  subjects,  rather  than  the  sellers  of  trans- 
portation, is,  therefore,  a  modern  necessity. 

These  considerations  led  some  years  since  to  the  creation  of  a 
Federal  Commission  by  the  Congress  of  the  United  States,  upon 
whom  both  judicial  and  legislative  power  was  attempted  to  be  con- 
ferred— the  judicial  power  to  declare  an  existing  rate  to  be  unjust, 


19 

and  the  legislative  power  to  determine  what  the  rate  should  be 
thereafter.  The  purpose  of  the  statute  has  since  been  aborted  by 
a  decision  of  the  Supreme  Court  of  the  United  States  holding  that 
the  act.  gave  no  legislative  power  to  the  commission  to  fix  rates,  but 
conferred  only  judicial  power  to  determine  that  a  specific  rate  was 
unjust.  For  instance,  under  the  decision  of  the  court  the  commis- 
sion may  declare  that  a  SO-cent  rate  is  too  high,  but  it  has  no 
power  to  say  what  a  just  rate  is.  The  transportation  company  is 
left  free  to  impose  a  19-cent  rate  until  it  in  turn  may  be  declared 
unjust  and  set  aside,  and  so  on  ad  infinitum.  The  effect  of  the 
court's  decision  is  to  emasculate  the  statute  and  leave  little  of  it 
worth  preserving. 

The  power  of  Congress  to  confer  upon  a  commission  both  judi- 
cial power  to  decide  what  is  unjust  and  the  legislative  power  to 
declare  what  is  right,  is  not  open  to  debate.  That  has  often  been 
judicially  determined.  And  a  like  power  is  vested  in  the  General 
Assembly  of  this  State  in  regard  to  commerce  within  its  own  bor- 
ders. 

While  the  Congress  of  the  United  States  has  sole  jurisdiction  of 
all  transportation  questions  relating  to  interstate  commerce,  the 
State  is  sovereign  in  its  jurisdiction  of  all  such  questions  in  so  far 
as  they  relate  to  State  commerce.  The  question  is  a  live  one,  and 
is  of  great  importance  not  only  to  the  shippers  and  the  transporta- 
tion companies  of  the  State  carrying  on  interstate  commerce,  but 
to  every  producer  and  every  consumer  in  the  State. 

•  The  question  is  a  difficult  one  and  deserves  our  most  considerate 
care  and  intelligent  judgment.  Its  consideration  should  be  entered 
upon  dispassionately  and  should  be  continued  without  prejudice 
against  or  a  desire  to  punish  the  transportation  companies  of  the 
State.  On  the  other  hand,  the  wealth  and  power  of  such  compa- 
nies ought  not  to  be  permitted  to  exclude  the  people  or  the  needs 
of  the  shippers,  the  producers  or  the  consumers  of  the  State  from 
our  consideration.  As  between  the  two  we  should  hold  an  even 
balance. 

Like  considerations  have  led  to  the  establishment  of  railroad 
commissions  in  thirty-one  States  of  the  Union,  and  in  twenty  of 
these  the  commissions  are  given  power  to  establish  rates. 

The  same  considerations  that  led  to  the  creation  of  the  Interstate 
Commerce  Commission  by  the  Federal  Congress  and  to  the  estab- 
lishment of  commissions  in  other  States,  now  make  it  imperative 
that  a  State  railroad  commission  be  created  by  this  General  As- 
sembly. 


20 


POWER    TO    FIX    RATES    ESSENTIAL. 

Such  commission  should  have  power,  not  only  to  decide  that  an 
existing  rate  is  illegal  and  unjust,  but  it  should  also  be  given  au- 
thority to  determine  what  would  be  a  legal  and  just  rate  and  to 
declare  the  same.  And  the  rate,  when  so  fixed  by  the  commission, 
should  stand  until  reversed  by  the  judgment  of  some  appellate  tri- 
bunal to  which  the  right  of  appeal  should  be  provided  for. 

Without  the  power  to  fix  rates,  the  commission  would  not  be 
effective.  If  the  evils  sought  to  be  reformed  are  to  be  reached,  the 
power  mentioned  is  essential.  The  law  should  also  be  so  framed 
as  to  prevent  unreasonable  and  inexcusable  delay  in  the  transporta- 
tion of  freight  or  cars,  or  unjust  discrimination  in  rates,  either  by 
way  of  rebates  or  otherwise.  It  should  also  prohibit  discrimination 
against  localities  in  furnishing  cars  and  should  have  some  provi- 
sion relative  to  the  transfer  and  switching  of  cars.  Bills  of  lading, 
releasing  or  limiting  the  common  law  liability  of  carriers  with  ref- 
erence to  property  covered  by  such  bills  while  in  the  custody  of 
such  carrier,  should  be  prohibited,  and  the  commission  should  have 
power  to  hear  and  determine  differences  affecting  any  of  the  mat- 
ters suggested,  whether  arising  between  shippers  and  carriers,  or 
between  the  carriers  themselves. 

The  recent  and  growing  desire  for  national  ownership  of  rail- 
roads is  due  very  largely  to  the  unjust  rates,  rebates,  discrimina- 
tions and  arbitrary  conduct  and  management  of  the  great  transpor- 
tation companies  in  their  relations  with  the  public.  I  am  sure  such 
a  policy  is  a  mistaken  one.  And  I  am  equally  sure  that  the  enact- 
ment of  a  just  and  fair  law,  creating  a  railroad  commission  and 
clothing  it  with  power  to  correct  the  abuses  that  have  grown  up  in 
connection  with  the  transportation  business  of  the  country,  ought 
not  to  be  opposed  by  the  managements  of  such  corporations.  In- 
deed, they  ought  to  consent  to  the  enactment  of  a  law  which  shall 
provide  for  fair  and  just  supervision  through  a  properly  consti- 
tuted commission.  By  consenting  to  the  correction  of  such  abuses 
they  will  do  much  to  stay,  and  perhaps  to  avert,  the  more  radical 
sentiment  of  the  country  just  now  crystallizing  in  the  demand  for 
public  ownership. 

GROWING    RESPECT    FOR    THE    L.AW. 

There  are  multiplying  signs  throughout  the  country  of  a  grow- 
ing respect  and  regard  for  the  sacredness  of  the  law  thai  are  re- 
assuring and  hopeful,  and  nowhere  is  this  sentiment  more  pro- 
nounced than  in  Indiana..  While  lawless  assemblages,  riots  and 


21 

lynchings  have  decreased  within  the  last  year  in  all  the  States 
taken  as  a  whole,  there  have  been  none  in  Indiana.  It  is  my  most 
sincere  wish  and  hope  that  this  condition  may  continue;  that  re- 
spect for  the  law  may  increase,  and  that  the  sentiment  for  its  en- 
forcement may  intensify  throughout  the  borders  of  the  State  until 
all  shall  recognize  its  majesty  and  give  willing  obedience  to  its 
mandates.  The  law  is  freedom's  only  safeguard ;  without  it  there 
can  be  no  such  thing  as  liberty. 

Whoever  wilfully  disregards  or  violates  it  pulls  down  the  pillars 
of  his  own  house  and  sins  against  his  country,  its  institutions  and 
his  kind.  And  this  applies  with  equal  force  to  all  men — to  the 
rich  and  the  poor,  to  the  great  and  the  small,  to  the  capitalist  and 
the  laborer,  to  the  public  official  and  to  the  private  citizen.  Be- 
fore the  law  all  these  must  be  equal,  and  they  shall  be  so  consid- 
ered by  this  administration.  The  law  shall  be  enforced  without 
fear  or  favor,  in  the  cities,  in  the  country  and  everywhere,  in  so 
far  as  the  administration  can  control  its  enforcement  either  by  pre- 
cept, example  or  mandate. 

FREE    PASS    EVIL A    FORM    OF    BRIBERY. 

A  custom  of  giving  and  receiving  free  transportation  has  grown 
up,  on  the  part  of  transportation  companies  on  the  one  side,  and 
of  public  officials  on  the  other.  These  favors  are  not  bestowed 
upon  the  same  men  in  private  life,  but  are  extended  to  them  only 
upon  their  elevation  to  public  place.  They  are  given  as  compli- 
mentary, and  are  bestowed  quite  generally,  with  here  and  there 
an  exception,  upon  the  officers  of  every  department  of  the  govern- 
ment, municipal,  county  or  state.  Indeed,  it  is  not  unusual  for 
officers  whose  duties  do  or  may  affect  the  interests  of  such  com- 
panies, as  against  the  interests  of  the  public,  to  accept  not  only 
free  transportation  from  the  railroad  companies,  but  free  telegraph 
and  express  franks  from  telegraph  and  express  companies  as  well. 

It  is  said  in  defense  of  the  custom  that  such  favors  are  mere 
gratuities  or  courtesies,  the  acceptance  of  which  creates  no  obliga- 
tion to  the  donor  on  the  part  of  the  officer  receiving  them,  and  that 
many  honest  men  accept  these  favors  and  are  not  improperly  in- 
fluenced by  them.  It  scarcely  can  be  urged,  however,  that  such 
favors  are  either  given  or  accepted  from  a  sense  of  civic  pride  or 
righteousness.  Tlir  fact  that  some  men  receive  them  without  any 
recognition  of  the  favor  implied  by  such  acceptance  and  arc  not 
improperly  influenced  thereby  is  an  imperfect  defense,  for  it  is  of 
itself  a  confession  that  some  men  who  accept  them  are  improperly 


99 


influenced.  There  are  no  more  practical  business  men  in  the  world 
than  the  managers  of  the  great  railway,  telegraph  and  express 
corporations  of  the  country,  and  these  men  would  not  annually 
give  away  to  public  officials  in  Indiana  thousands  of  dollars  in  value 
of  such  favors  if  the  net  aggregate  results  of  the  custom  were  not 
beneficial  to  them.  If  the  resultant  benefits  were  not  worth  more 
to  them  than  the  value  of  the  transportation  or  franks  given,  none 
would  be  issued. 

The  fact  that  the  custom  is  continued  year  after  year  is  strong 
evidence  that  it  pays  to  continue  it.  No  lawyer  would  permit  a 
juror  to  remain  upon  a  jury  where  high  interests  of  his  client  were 
involved  if  he  knew  such  juror  had  received  and  accepted  substan- 
tial favors  from  the  adverse  party  to  the  suit,  and  he  would  most 
certainly  insist  upon  the  discharge  of  such  juror  from  the  panel 
if  he  were  to  receive  and  accept  such  favors  after  he  had  been 
sworn  as  a  juror  in  the  cause.  If,  in  any  such  case,  the  verdict 
went  against  his  client,  and  after  verdict  he  learned  the  fact  of 
the  juror's  acceptance  of  such  favors  from  the  hands  of  the  suc- 
cessful party  to  the  suit,  there  is  no  lawyer  who  would  hesitate 
to  make  such  fact  the  basis  of  a  motion  for  a  new  trial,  and  there 
is  no 'court  that  would  not  grant  the  motion  upon  proof  of  the 
charge  made.  The  plea  on  the  part  of  the  offending  litigant  and 
juror  that  the  favors  given  and  received  were  mere  courtesies  and 
did  not  influence  the  verdict  would  be  neither  considered  nor  re- 
ceived as  a  sufficient  answer. 

The  officials  of  the  various  municipalities  and  counties,  and  the 
officials  of  the  State,  constitute  the  jury  before  whom  are  brought 
countless  grave  and  important  interests,  upon  the  one  side  of  which 
are  the  corporations  and  upon  the  other  side  of  which  are  the  peo- 
ple. For  this  reason  such  officials  have  no  right  to  use  or  accept 
substantial  and  continuing  favors  from  the  corporations  during 
their  terms  of  service.  Where  the  whole  jury  accepts  them  there 
need  be  no  surprise  if  the  people  complain  that  the  jury  is  packed 
against  their  interests.  Right  or  wrong,  ill  or  well-founded,  such 
a  feeling  is  an  unwholesome  one.  The  simple  truth  is  that  the 
custom  is  wrong  and  indefensible  and  often  leads  to  abuses  little 
short  of  scandal.  Reduced  to  their  last  analysis,  such  favors  are 
petty  bribes.  The  fact  that  they  sometimes  fall  short  of  their  pur- 
pose is  not  a  sufficient  answer.  The  tendency  of  the  custom  is  to 
make  men — not  all  men  by  any  means,  but  some  men — servile  to 
those  from  whom  they  are  received.  An  end  should  be  put  to  the 
custom.  The  abuse  of  free  transportation  and  free  franking  privi- 
leges should  stop. 


The  time  to  reform  is  now.  In  recognition  of  tke  plainest  prin- 
ciples of  right,  in  common  honesty,  in  answer  to  the  people's  just 
demand  and  out  of  protection  to  themselves,  public  officials  should 
discontinue  the  use  or  acceptance  of  such  favors.  I  submit  for 
your  consideration  the  enactment  of  a  statute  that  will  prohibit 
the  giving  of  free  transportation  or  of  the  franking  privilege  to 
any  official,  municipal,  county  or  state,  by  any  person  or  corpora- 
tion, or  the  acceptance  of  any  such  favor  by  any  such  officer,  either 
directly  or  indirectly,  under  such  penalties  as  shall  insure  its  ob- 
servance. The  inhibition  should  also  include  telegraph  and  ex- 
press company  franks.  Such  an  act  will  purify  and  strengthen 
the  public  service  and,  in  my  judgment,  will  meet  with  the  hearty 
approval  of  the  people  of  the  State. 

LOBBYISTS    NOT    SAFE    COUNSELORS. 

The  character  of  the  legislation  coining  before  you  for  your 
consideration  is  such  as  to  bring  to  your  respective  chambers  the 
representatives  of  many  great  corporations.  It  is  right  that  they 
should  be  heard,  but  it  is  wrong  that  they  should  exclude  from 
your  consideration  the  varied  and  important  interests  of  the  public 
or  the  great  masses  of  the  people  who,  of  necessity?  cannot  have 
paid  agents  to  voice  their  interest  to  you.  All  lobbyists  are  not 
corrupt,  and  it  may  be  that  they  sometimes  perform  useful  public 
service,  but  the  paid  agent  of  any  special  interest  is  not,  as  a  rule, 
a  safe  counselor.  He  is  wont  to  look  only  to  the  interests  of  those 
who  employ  him,  and  in  his  zeal  to  "make  good"  with  them,  to 
forget  the  greater  and  more  important  interests  of  the  public. 

Corporate  interests  of  late  have  become  far  too  powerful  in 
legislative  assemblies.  This  is  true  in  most  of  the  States,  and  it 
has  been  true  in  ours.  There  have  been  instances  in  the  not  far 
distant  past  when  the  paid  agents  of  such  corporations  invaded 
the  sacred  precincts  of  the  General  Assembly,  and  with  unseemly 
and  arrogant  assumption  took  their  place  upon  the  floor  during  a 
session  of  that  body,  and  on  a  roll  call  upon  a  measure  involving 
matters  of  the  gravest  concern  to  the  people,  sought  to  dictate  the 
votes  of  some  of  the  members  upon  such  measure.  And,  yet,  they 
were  not  removed  nor  denied  the  privileges  of  the  floor,  but  con- 
tinued to  enjoy  them  until  the  end  of  the  session.  It  is  difficult 
for  the  people  to  believe  that  such  conduct  would  have  been  tol- 
erated, much  less  condoned,  by  men  who  owed  no  favors  to  the  cor- 
porations represented  by  the  offending  agents.  You  can  end  the 
reign  of  the  lobbyist  in  Indiana  if  you  will,  a»d  I  venture  to  express 
the  Jiope  that  you  will  do  so. 


24 


NICHOLSON  LAW  AMENDMENT. 

The  act  of  the  General  Assembly  of  1895,  commonly  known 
as  the  "Nicholson  law,"  was  enacted  in  answer  to  the  demands  of 
an  aroused  and  enlightened  and  righteous  public  sentiment.  In 
the  main  it  is  a  good  law  and  ought  to  be  permitted  to  stand.  It 
provides  for,  and  legalizes  the  right  of  petition  on  the  part  of  the 
legal  voters  of  any  township,  or  of  any  ward  in  any  city,  against 
the  granting  of  license  to  any  applicant  to  retail  intoxicating 
liquors  in  such  township  or  ward,  and  that  right  ought  not  to  be 
given  up  or  surrendered. 

Rules  of  practice  under  the  present  statute  and  many  questions 
of  law  relating  to  its  enforcement  have  been  settled  by  the  courts, 
and  are  now  established  and  well  understood.  The  several  sec- 
tions of  the  act  have  been  so  frequently  interpreted  by  the  courts 
that  the  law,  taken  in  connection  with  the  decisions  touching  its 
meaning,  constitutes  a  system  for  the  control  of  the  retail  liquor 
traffic  of  such  importance  that  the  friends  of  law  and  order  ought 
to  stand  by  it  as  it  is,  rather  than  consent  to  its  repeal,  or  to  the 
substitution  of  any  new  or  untried  system.  An  entirely  new  act 
would  require  years  of  vexatious  litigation  before  a  judicial  inter- 
pretation of  it  could  be  had,  or  its  meaning  be  established  or  under- 
stood. 

There  is,  however,  a  grave  defect  in  the  present  statute.  It 
can  be  remedied  by  an  amendment,  which  will  add  greatly  to  its 
effectiveness,  without  impairing  its  value  or  destroying  the  decisions 
of  the  courts  which  have  upheld  it. 

The  aroused,  enlightened  and  righteous  public  sentiment  which 
made  essential  the  enactment  of  the  law  ten  years  ago,  now  makes 
imperative  its  amendment.  That  sentiment  is  today  stronger,  more 
enlightened  and  more  powerful  than  ever,  and  deserves  quick  and 
satisfying  response  at  our  hands. 

The  defect  to  which  I  direct  your  attention  is  found  in  Section 
9  of  said  act.  This  section  grants  to  a  majority  of  the  legal  voters 
of  any  township,  or  of  any  ward  in  any  city,  the  right  to  remon- 
strate in  writing  against  the  granting  of  a  license  to  any  applicant 
for  license  to  sell  in  any  such  township  or  ward,  and  provides  that 
after  the  filing  of  such  remonstrance,  it  shall  be  unlawful  for  the 
Board  of  County  Commissioners  to  grant  a  license  to  such  applicant 
during  a  period  of  two  years  from  the  date  of  the  filing  of  such 
remonstrance.  By  this  statute  the  right  of  remonstrance  is  vested 
in  the  majority  of  the  legal  voters  of  any  township,  or  of  any  ward 


25 

in  any  city.  But  the  right  is  limited  in  its  application  to  a  remon- 
strance against  the  individual  seeking  the  license  and  not  against 
the  trade,  whereas  the  business  of  retailing  liquors  is  the  evil  sought 
to  be  excluded  or  prohibited  by  the  people  who  remonstrate  against 
an  applicant.  Their  objections  are  not  personal,  nor  are  they  di- 
rected against  the  applicant  as  an  individual.  They  are  based 
upon  moral,  economic  and  public  grounds,  which  affect  the  order, 
peace  and  repose  of  society  within  such  territory,  and  are  against 
the  traffic  itself.  To  the  people  within  such  territory  the  prohibi- 
tion of  the  business  is  everything,  and  the  individual  applying  for 
license  is  nothing. 

PRESENT    NEED    OF    REPEATED    REMONSTRANCES. 

When  the  statute  under  consideration  was  enacted,  the  boards 
of  commissioners  of  the  several  counties  in  the  State  could  hold 
regular  sessions  of  their  respective  boards  but  once  in  three  months. 
An  application  for  license  could  be  filed  only  at  a  regular  session. 
Thus  applications  were  limited  to  the  four  quarterly  sessions  of 
such  boards  held  within  each  year.  This  brought  the  question  of 
remonstrance  before  the  people  but  four  times  a  year.  Since  the 
enactment  of  the  "Nicholson  law"  there  has  been  a  change  in  the 
statute  relative  to  the  time  of  the  regular  meetings  of  boards  of 
commissioners.  Such  boards  are  now  required  to  meet  in  regular 
session  once  each  month.  The  effect  of  this  change  in  the  law  has 
been  to  make  it  possible  for  an  application  from  any  township,  or 
any  ward  in  any  city,  to  be  filed  every  thirty  days.  This  brings 
the  question  of  remonstrance  before  the  people  twelve  times  a  year. 
Those  who  desire  to  engage  in  the  retail  liquor  traffic  make  use  of 
the  present  provision  of  the  law,  to  the  annoyance  and  harassment 
of  the  people  of  many  townships  and  city  wards.  In  some  of  them 
"eternal  vigilance"  has  ceased  to  be  the  price  of  liberty  and  has 
become  ineffectual  to  preserve  the  rights  of  the  people.  A  remon- 
strance carrying  the  necessary  majority  to  prevent  the  granting  of 
license  is  filed  today  and  the  license  is  defeated,  but  tomorrow  some 
other  applicant,  in  the  pay  of  the  wholesale  liquor  interests,  gives 
notice  of  his  intention  to  apply  at  the  next  session  of  the  board  of 
commissioners,  which  session  is  only  four  weeks  away. 

If  a  new  remonstrance  is  filed  and  the  second  applicant  is  de- 
feated, the  same  performance  is  enacted  by  some  one  else,  and 
so  on,  month  after  month  and  year  after  year,  until,  worn  out  and 
discouraged  by  constant  effort  and  expensive  litigation  that  never 
ends,  and  from  which  there  is  no  respite,  the  people  are  defeated 


26 

and  the  will  of  the  majority  is  overborne  and  trampled  upon  by 
the  agents  of  a  traffic,  the  unholiness  of  which  all  men,  save  those 
engaged  in  it,  confess. 

This  condition  is  intolerable,  and  ought  not  to  continue  beyond 
the  day  of  your  adjournment  and  the  publication  of  your  enact- 
ments. It  destroys  the  peace  and  disturbs  the  order  and  tran- 
quillity of  society,  creates  constant  and  unceasing  turmoil  among 
the  people,  subjects  them  to  frequent  trials  and  constant  expense," 
and  finally  ends  in  the  defeat  of  their  often  and  solemnly  expressed 
will. 

The  statute  should  be  so  amended  that  the  remonstrance  pro- 
vided for  shall  be  against  the  granting  of  license  to  any  and  all 
applicants,  and  where  successful,  that  it  shall  be  unlawful  there- 
after for  the  board  of  commissioners  to  grant  a  license  to  any 
applicant  therefor  during  a  period  of  two  years  from  the  filing  of 
said  remonstrance.  Such  a  remonstrance  will  strike  directly  at  the 
traffic,  and  not  at  the  individual.  If  successful,  it  will  exclude  the 
business  from  a  township  or  ward  for  a  period  of  two  years,  and 
give  peace,  order  and  repose  to  the  community. 

PROPOSED    CHANGE    WOULD    NOT    IMPAIR    SYSTHM. 

It  will  give  the  right  of  petition  a  practical  and  an  efficient 
application,  and  will  go  far  toward  satisfying  public  sentiment 
upon  this  most  difficult  question.  Such  an  amendment  will  not 
impair  the  system  created  by  the  Nicholson  law  for  the  control  of 
the  traffic,  nor  the  judicial  interpretation  it  has  received.  On  the 
contrary,  it  will  strengthen  and  give  vitality  to  its  provisions.  The 
precedents  already  established  will  remain  precedents  still. 

I  have  given  much  thought  and  consideration  to  this  subject, 
because  of  its  importance,  because  I  have  been  and  am  conscious 
that  many  of  my  fellow-citizens,  whose  judgment  and  good  will  I 
greatly  value,  have  been  and  are  profoundly  interested  in  the  ques- 
tion, and  have  been  and  are  giving  it  their  most  sincere  attention, 
and  because  many  members  of  your  respective  bodies  have  been 
and  are  considering  remedial  legislation  affecting  the  existing 
statute. 

Public  sentiment  relative  to  such  legislation  never  was  as  strong 
nor  as  purposeful  as  it  is  today,  and  I  would,  if  I  could,  direct  that 
sentiment  along  safe  and  practical  lines.  I  therefore  appeal  to 
you,  and  to  the  great  body  of  the  people  of  Indiana,  without  regard 
to  party  affiliations,  to  join  in  an  effort  to  secure  the  amendment 


27 

suggested.  The  question  is  not  a  party  question.  It  is  at>ove  and 
beyond  all  parties  and  is  as  broad  as  our  common  citizenship,  as 
deep  as  our  free  institutions,  and  as  abiding  as  righteousness  itself. 

IN    CONCLUSION. 

This  address  has  already  grown  too  long,  but  there  are  so  many 
important  questions  upon  which  I  have  not  touched  that  I  close 
with  reluctance.  I  do  not  forget  that  all  my  predecessors  in  the 
high  office  to  which  I  am  called  were  capable  and  efficient  executives ; 
that  many  of  them  were  much  more  than  that,  and  that  one,  at 
least,  was  supremely  great,  or  that  I  must  in  some  degree  measure 
up  to  them.  I  am  conscious  that  in  the  discharge  of  the  grave 
duties  that  await  me  I  cannot  stand  alone  and  I  shall  not  try  to  do 
so.  I  therefore  turn  to  you  and  to  the  people  of  the  State  for 
assistance  and  support.  To  you  and  to  them  I  shall  often  come, 
and  were  it  not  for  the  confidence  I  have  of  your  forbearance  and 
of  their  partiality,  I  should  have  little  hope  of  succeeding  amid  the 
multiplying  and  perplexing  difficulties  of  the  coming  four  years. 

But  your  strength  shall  be  my  strength,  and  their  will  shall  be 
my  will.  I  believe  in  you,  and  they,  I  am  sure,  will  not  go  far 
astray  nor  long  remain  away  from  the  path  of  truth.  Both  you 
and  I  can  safely  trust  them.  They  did  not  fail  either  Lincoln  or 
Morton  in  their  day,  and  they  will  not  fail  us  in  ours  if  we  do  but 
prove  worthy  and  fitly  bear  their  high  commission. 

Humbled  and  chastened  by  the  responsibilities  of  this  hour,  by 
those  yet  to  come,  and  by  the  memory  of  the  great  men  who  have 
preceded  me;  sustained  by  an  abiding  faith  in  my  fellow-citizens 
and  by  an  unfaltering  trust  in  the  goodness,  the  mercy  and  the 
guiding  care  and  wisdom  of  Almighty  God,  I  now  assume  the  office 
of  chief  executive  of  this,  to  me,  the  dearest  State  in  the  great 
republic. 

J.  FRANK  HANLY. 


28 
TO  THE  SIXTY-FIFTH   GENERAL  ASSEMBLY. 


JANUARY  10,  1907. 
Gentlemen  of  the  Senate  and  House  of  Representatives  : 

The  people  have  spoken,  and  you  are  here  bearing  their  com- 
mission to  act.  You  are  convened  in  an  auspicious  hour  of  our 
history, — the  beginning  of  the  last  decade  of  the  first  century  of 
statehood, — and  under  circumstances  calculated  to  inspire  efficient 
and  high  service.  Material  prosperity  outruns  comparison. 
Wealth  surpasses  precedent.  Labor,  agriculture,  manufacturing, 
mining  and  commerce  have  touched  and  passed  high  tide  and  the 
ebb  is  not  yet  begun.  Monetary  conditions  arc  at  their  best.  Dur- 
ing the  last  year  there  was  no  failure  of  any  financial  institution 
within  the  State.  Taken  all  in  all  conditions  are  indeed  unusual. 
They  present  to  you  a  problem  unlike  that  which  usually  confronts 
legislative  assemblies.  Where  others  have  been  called  to  consider 
legislation  providing  the  means  and  opportunity  for  the  acquire- 
ment of  wealth,  you  are  compelled  to  devise  enactments  requiring 
the  just  and  wise  administration  of  wealth.  Your  problem  is  not 
how  to  create  new  industrial  and  commercial  opportunity,  but  how 
to  save  the  industrial  and  commercial  opportunity  which  already  is. 
It  is  not  how  to  make  possible  the  further  organization  of  mighty 
aggregations  of  capital  and  powerful  corporations  equipped  to 
transact  great  affairs  and  to  conduct  gigantic  enterprises,  but  how 
to  direct  the  purposes  and  limit  the  operations  of  those  which  the 
industry  and  genius  of  the  age  have  called  into  being  under  exist- 
ing laws,  so  that  their  benefits  shall  be  diffused  among  the  people. 

The  challenge  is  not,  "Can  you  create?"  but,  "Can  you  admin- 
ister?" It  came  to  the  people  before  it  came  to  you.  They  heard 
and  understood,  and  have  made  heroic  answer.  They  have  risen 
to  new  ideals,  and  have  caught  visions  of  better  things.  In  them 
moral  conviction  is  triumphant.  Civic  duty  and  public  obligation 
have  taken  on  a  new  and  more  sacred  meaning.  They  know  again 
what,  for  a  time,  they  did  not  seem  to  remember, — that  their  rights 
—the  rights  of  the  masses — are  superior  to  the  claims  or  demands 
of  any  special  interest,  natural  or  corporate.  They  are  conscious 
again  that  this  is  their  government,  and  they  intend  that  it  shall 
be  administered  in  all  its  departments  in  their  behalf.  Stirred  by 
the  rediscovery  of  old  but  half-forgotten  power,  they  mean  that 


29 

whosoever  holds  their  commission  shall  answer  the  challenge  of  the 
hour  even  as  they  have  answered  it.  They  will  be  impatient  of 
delay,  and  swift  to  avenge  failure. 

To  serve  at  such  a  time  and  under  such  conditions  is  an  unusual 
and  an  exalted  privilege.  Of  time  and  circumstance  such  as  these 
opportunity  is  born.  He  who  meets  it  as  becomes  a  man,  measur- 
ing up  to  its  height  and  breadth,  is  to  be  extolled  and  honored.  He 
who  fails  to  meet  it  for  lack  of  capacity  is  to  be  pitied  and  forgiven. 
But  he  who  possesses  the  ability  and  fails  from  lack  of  moral  worth 
is  to  be  condemned  and  despised.  For  him  there  is  no  defense  in 
any  form.  I  congratulate  you  that  such  time  and  circumstance 
both  are  yours. 

The  Constitution  imposes  upon  the  executive  a  share  in  your 
deliberations.  It  devolves  upon  him  the  duty  of  giving  you  "in- 
formation touching  the  conditions  of  the  State,"  of  recommending 
for  your  consideration  such  legislation  "as  he  shall  judge"  the  wel- 
fare of  the  State  demands,  and  of  approving  or  disapproving  your 
every  enactment.  To  this  extent  he  shares  your  responsibility  and 
becomes  a  part  of  the  legislative  department.  It  is  therefore  im- 
portant that  relations  of  confidence  and  mutual  helpfulness  exist 
between  you  and  him  and  that  he  have  your  counsel  and  good-will. 
Impressed  with  the  belief  that  nothing  short  of  this  will  enable 
either  you  or  myself  to  discharge  in  full  measure  our  duty  to  the 
people  whose  servants  we  are,  I  tender  you  my  confidence  and  good- 
will without  reserve  or  qualification,  and  pledge  you  the  limit  of 
my  power  in  every  matter  of  public  concern  which  may  engage  your 
efforts. 

FINANCES. 

The  State's  finances  are  especially  satisfactory.  The  revenues 
accruing  to  the  general  fund  for  the  fiscal  year  ending  October  31, 
1905,  exclusive  of  transfer  funds,  aggregated  $3,615,844.38. 
During  the  same  year  the  expenditures  were  $3,465,250.91,  leav- 
ing an  excess  of  receipts  of  $150,593.47,  and  a  treasury  balance 
of  $283,998.84.  In  this  balance  no  advanced  payments  from 
county  treasurers  is  included. 

On  the  31st  day  of  October,  1904,  the  balance  in  the  treasury 
was  $60,601.93,  but  to  obtain  this  balance  advanced  payments  from 
county  treasurers  had  been  called,  and  the  revenue  for  1905  antici- 
pated in  the  sum  of  $154,740.  But  for  these  advanced  payments 
there  would  have  been  no  treasury  balance,  but,  instead,  a  deficit 
of  $94,138.07. 


30 

It  is  gratifying  to  know  that  at  the  close  of  the  fiscal  year  this 
deficit  was  recouped  and  a  clear  balance  of  $283,998.84  left  in  the 
treasury,  and  that  this  was  done  without  calling  a  single  advanced 
payment  or  anticipating  the  revenue  of  the  next  year  a  single 
dollar. 

For  the  fiscal  year  ending  October  31,  1906,  the  revenues  of 
the  general  fund,  exclusive  of  transfer  funds,  aggregated  $4,200,- 
164.83.  The  disbursements  were  $3,800,037.91,  leaving  an  excess 
of  receipts  over  disbursements  of  $400,126.92,  and  a  treasury  bal- 
ance of  $507,654.60,  in  which  there  were  no  advanced  payments 
whatever  and  to  obtain  which  the  revenues  of  the  present  year  were 
neither  impaired  nor  anticipated. 

The  revenues  accruing  to  the  general  fund  last  year  were  in- 
creased, however,  not  only  from  natural  causes  due  to  the  increase 
in  the  value  of  taxables  in  the  State,  but  from  the  transfer  of  the 
3-cent  sinking  fund  levy  to  the  general  levy ;  also  from  covering 
back  into  the  treasury  several  substantial  sums  which  had  been 
theretofore  unlawfully  withheld  therefrom  by  delinquent  officials. 

Neither  the  revenues  accruing  to  the  general  fund  for  the  pres- 
ent fiscal  year,  nor  for  the  year  1908  nor  1909,  will  equal  those  of 
last  year.  Those  of  this  year,  however,  have  been  already  aug- 
mented by  the  payment  of  $22,356.40  of  insurance  taxes  by  insur- 
ance companies  which  have  been  due  the  State  since  the  expiration 
of  the  term  of  James  H.  Rice  as  Auditor  of  State — more  than 
twenty  years.  A  conservative  estimate  of  the  revenues  of  the  gen- 
eral fund  for  each  of  the  three  years  named,  is  $3,726,650.  Ap- 
propriations already  made  and  available  for  the  present  fiscal  year 
will  leave  a  treasury  balance  of  $266,309.29  at  the  end  of  the  year. 
This  sum,  therefore,  measures  the  limit  of  additional  appropria- 
tions which  may  be  made  available  for  the  present  fiscal  year  with- 
out necessitating  the  collection  of  advanced  payments  from  county 
treasurers  and  a  consequent  impairment  of  next  year's  revenues,  a 
result  which,  in  my  judgment,  should  be  avoided  with  scrupulous* 
care. 

If  the  income  of  the  general  fund  for  the  fiscal  year  ending  Oc- 
tober 31,  1908,  meets  the  estimate  made  and  the  regular  appropria- 
tions for  the  year  are  not  increased  beyond  what  now  seems  to  be 
a  necessary  aggregate  for  the  transaction  of  the  State's  business, 
there  will  be  $1,010,000  available  for  specific  appropriations  for 
said  year. 

For  the  fiscal  year  ending  October  31,  1909,  there  will  be  sub- 
stantially a  like  balance  available  for  specific  appropriations,  ex- 


31 

cept  as  it  may  be  impaired  by  the  expenses  of  the  Sixty-sixth  Gen- 
eral Assembly,  now  estimated  at  $125,000.  It  seems,  therefore, 
that,  in  round  numbers,  $2,000,000  must  be  the  limit  of  specific 
appropriations  for  the  coming  biennial  period,  if  we  are  to  keep 
within  the  revenues  of  the  State  and  are  to  avoid  the  impairment 
of  the  revenues  of  the  next  biennial  period.  To  do  this  it  will  be 
necessary  to  transfer  the  3-cent  sinking  fund  levy  from  the  sinking 
fund  to  the  general  fund  for  the  year  1908,  as  was  done  for  each 
of  the  years  1905,  1906  and  1907.  Within  the  last  two  years 
we  have  paid  $407,000  on  the  principal  of  the  State  debt,  thereby 
cancelling  all  of  the  debt  that  is  now  payable.  This  leaves  but 
$800,000  of  foreign  bonded  indebtedness,  none  of  which  will  be 
payable  until  January,  1910,  and  none  of  which  will  be  due  until 
1915.  To  meet  this  debt  within  the  first  year  after  the  State's  op- 
tion to  pay  matures,  it  would  be  necessary  to  restore  the  3-cent  sink- 
ing fund  levy  to  the  sinking  fund  for  1908  and  1909.  The  fund 
derived  from  this  levy  would  be  more  than  sufficient,  however,  to 
retire  the  whole  of  the  debt,  as  such  a  levy  would  by  that  time  pro- 
duce an  annual  revenue  of  something  more  than  $500,000.  I  have 
been  anxious  that  the  debt  should  be  paid  at  the  earliest  possible 
date  and  have  hoped  that  it  could  be  done  in  January,  1910,  but 
necessity  compels  the  completion  of  the  institutions  now  under  con- 
tract. The  demand  that  they  be  completed  is  so  imperative  that 
I  have  been  compelled  to  yield  thereto,  and  I  therefore  recommend 
that  the  sinking  fund  levy  of  3  cents  be  retained  for  the  benefit  of 
the  general  fund  for  the  year  1908,  and  that  it  be  restored  to  the 
sinking  fund  for  1909  and  1910.  This  will  enable  the  State  to  re- 
tire $500,000  of  the  debt  within  a  year  after  its  option  to  pay  ma- 
tures, and  the  remaining  $300,000  within  six  months  thereafter. 
The  necessities  of  the  State  absolutely  require  the  completion  of  the 
institutions  now  under  construction  within  the  coming  biennial  pe- 
riod. The  emergency  is  so  great  that  I  cannot  urge  upon  you  too 
strongly  the  importance  of  making  adequate  provision  therefor.  I 
know  of  no  way  this  can  be  done  with  as  little  inconvenience  as  it 
can  be  along  the  lines  suggested.  Posterity  will  certainly  have  no 
just  cause  of  complaint  of  us  if  we  construct  and  pay  for  these 
great  public  improvements  and  retire  the  last  dollar  of  foreign-held 
indebtedness  within  nineteen  months  after  the  privilege  to  pay  ob- 
tains, and  three  and  a  half  years  before  the  obligations  evidencing 
such  debt  mature.  The  step,  if  taken,  will  rest  upon  so  many  sub- 
stantial reasons  that  it  will  bear  analysis  and  debate  with  certainty 
of  justification  in  the  end. 


32 


CONTINGENT    FUNDS. 

For  the  fiscal  year  ending  October  31,  1905,  the  sum  of  $10,000 
was  appropriated  for  the  Governor's  Civil  and  Military  Contingent 
fund.  The  sum  of  $619.25  was  expended,  of  which  $139.75  were 
expended  by  my  predecessor  in  the  investigation  of  the  Southern 
Indiana  Hospital  for  the  Insane  and  in  the  matter  of  the  claim  of 
Vincennes  University.  The  remainder,  or  $479.50,  was  expended 
by  the  present  Executive.  The  unexpended  balance  of  the  appro- 
priation, amounting  to  $9,380.75,  was  covered  back  into  the  gen- 
eral fund. 

For  the  fiscal  year  ending  October  31,  1906,  $10,000  were  ap- 
propriated for  this  fund,  $5,453  of  which  were  expended  and 
$4,547  covered  back  into  the  treasury.  The  expenditures  were  all 
on  account  of  expense  incurred  in  the  investigation  of  the  office  of 
the  Auditor  of  State. 

The  appropriation  for  the  Governor's  Emergency  Contingent 
Fund  for  the  fiscal  year  ending  October  31,  1905,  was  $30,000,  of 
which  $2,206.05  were  expended  by  my  predecessor,  and  the  sum 
of  $116.65  by  the  present  Executive  on  account  of  expenses  of  the 
tuberculosis  commission,  authorized  by  the  Sixty-fourth  General 
Assembly.  The  total  expenditures  were  $2,322.70.  The  unex- 
pended balance,  amounting  to  $27,677.30,  was  covered  back  into 
the  general  fund. 

The  appropriation  for  this  fund  for  the  fiscal  year  ending  Oc- 
tober 31,  1906,  was  $30,000,  all  of  which  was  expended  except  the 
sum  of  $1,123.26,  which  balance  was  covered  back  into  the  treasury. 
The  total  expenditures  from  this  fund  were  $28,876.74.  Of  this 
amount  $524.22  were  expended  to  defray  the  expenses  of  the  tuber- 
culosis commission;  $2,385.05  were  expended  in  behalf  of  the 
maintenance  account  of  the  State  Prison,  because  of  the  failure  of 
the  Sixty-fourth  General  Assembly  to  make  a  per  capita  appro- 
priation for  that  institution;  $4,000  were  also  expended  in  the 
completion  of  the  dining-room  for  the  State  Prison,  occasioned  by 
a  clerical  error  in  the  appropriation  act  of  the  Sixty-fourth  Gen- 
eral Assembly,  appropriating  $19,500  for  a  storeroom  which  cost 
but  $15,500,  and  appropriating  $15,500  for  a  dining-room  which 
cost  $19,500  (the  transposition  of  the  amounts  was  not  discovered 
until  after  the  buildings  were  nearing  completion.  The  excess  of 
one  specific  appropriation  could  not  be  used  to  make  up  the  de- 
ficiency of  the  other)  ;  $2,892.01  on  account  of  the  replacing  of  a 
boiler  at  the  School  for  Feeble-Minded  Youth ;  $241.50  on  account 


33 

of  expenses  incurred  in  the  case  of  the  State  of  Indiana  v.  David  E. 
Sherrick;  $1,200  on  account  of  fees  of  special  counsel  in  the  case 
of  the  State  of  Indiana  v.  Daniel  E.  Storms  ;  $7,805.29  on  account 
of  expense  incurred  in  the  invetigation  of  the  office  of  the  Auditor 
of  State;  $100  in  connection  with  the  stopping  of  pool  selling  at 
the  State  fair  grounds  in  the  summer  of  1905,  and  $1,175.89  on 
account  of  expenses  incurred  in  connection  with  the  closing  of  the 
gambling  resorts  at  French  Lick  and  West  Baden,  of  which 
$119.82  has  subsequently  been  returned  to  the  treasury  of  the 
State;  $7,025.89  for  maintenance  at  the  Girls'  Industrial  School, 
because  of  the  failure  of  the  Sixty-fourth  General  Assembly  to 
make  a  per  capita  appropriation  for  that  institution  and  the  great 
increase  in  the  number  of  inmates  during  the  past  year;  $280.55 
on  account  of  expense  incurred  in  the  case  of  the  State  of  Indiana 
v.  McCaslin,  for  the  recovery  of  eighty  acres  of  land  belonging  to 
the  State ;  $229.80  on  account  of  expense  incurred  in  the  investiga- 
tion of  the  State  Agency  Company,  and  $1,067.04  on  account  of 
expense  incurred  in  the  investigation  of  the  State  Life  Insurance 
Company. 

The  total  cost  of  the  proceedings  for  the  closing  of  the  gam- 
bling resorts  at  French  Lick  and  West  Baden  was  $1,374.72;  the 
aggregate  cost  of  the  tuberculosis  commission  up  to  the  close  of 
the  last  fiscal  year  was  $640.87 ;  the  investigation  of  the  offices  of 
the  Auditor  and  Secretary  of  State  cost,  in  the  aggregate,  $13,- 
258.29. 

DEFALCATION    IN    STATE    OFFICES. 

In  the  latter  part  of  August,  1905,  the  Executive  was  advised 
that  the  Auditor  of  State  had  failed  to  make  the  semi-annual  set- 
tlement with  the  Treasurer  of  State  due  July  1,  1905.  Upon  in- 
vestigation it  was  learned,  through  the  admissions  of  the  Auditor 
himself,  that  he  was  short  in  his  accounts  to  the  extent  of  $145,000. 
Settlement  was  demanded,  and  later  the  Auditor's  resignation. 
September  14,  1905,  he  resigned.  Hon.  Warren  Bigler  was  imme- 
diately appointed  to  fill  the  vacancy,  and  suit  was  promptly  begun 
upon  the  official  bond  of  the  ex- Auditor. 

The  amount  of  the  admitted  defalcation,  the  magnitude  of  the 
public  business  passing  through  the  office  and  the  lack  and  ne- 
cessity of  accurate  information  touching  the  condition  of  the  office 
impelled  the  Executive  to  appoint  a  commission  to  examine  and 
investigate  its  affairs.  Accordingly,  Hon.  W.  B.  Durborow  and 
Hon.  James  W.  Noel,  representing  the  two  dominant  political  par- 

[8—19891] 


34 

ties  in  the  State,  were  appointed,  together  with  Hon.  Warren  Big- 
ler,  Auditor  of  State,  by  executive  order,  and  instructed  to  "pursue 
the  investigation  and  make  examination  of  said  office  and  its  sev- 
eral departments,  uninfluenced  by  fear,  favor  or  affection,  and 
without  any  purpose  to  shield  any  person  or  party  or  to  advance 
the  interest  of  any  person  or  party,  to  the  end  that  the  whole  truth 
touching  the  affairs  of  the  office  for  said  term  may  appear  in  your 
report,  and  that  the  guilty  may  be  exposed  and  the  innocent  vin- 
dicated." 

The  members  of  the  committee  immediately  entered  upon  the 
discharge  of  their  duties,  under  this  order  of  appointment,  and 
after  almost  a  year  of  substantially  continuous  labor  they  filed  a 
report  of  their  investigations,  which  I  have  caused  to  be  printed 
and  laid  upon  your  desks,  and  to  which  I  invite  your  most  careful 
and  earnest  consideration.  It  is  a  clear,  accurate  and  convincing 
report,  prepared  by  able,  sincere  and  fearless  men  in  literal  com- 
pliance with  the  instructions  under  which  their  investigations  were 
conducted,  covering  both  the  auditing  and  insurance  department  of 
the  Auditor's  office. 

The  facts  touching  the  financial  interests  of  the  State,  as  dis- 
closed by  the  investigations  of  the  committee,  were  laid  from  time 
to  time  before  the  Governor  for  executive  consideration  and  action. 
From  this  report  it  appears  that  Mr.  Sherrick's  defalcation,  prin- 
cipal and  interest,  aggregated  on  the  14th  da}7  of  September,  1905, 
the  day  of  his  resignation,  $154,896.78.  On  March  1,  1906,  final 
payment  was  received,  with  interest  to  that  date,  the  total  amount 
returned  to  the  State  treasury,  principal  and  interest,  being  $156,- 
367.31. 

In  this  connection  I  submit  the  following  paragraph  from  the 
committee's  report: 

"The  State  has  the  remarkable  record  of  a  shortage  of  $154,896.78  hav- 
ing been  entirely  recovered  to  the  State  without  the  loss  of  a  dollar  of  prin- 
cipal and  with  the  addition  thereto  of  legal  interest  and  with  no  expense  ex- 
cept the  sum  of  $37.00  paid  to  a  shorthand  reporter  for  taking  evidence." 

The  expense  referred  to  refers,  of  course,  to  that  incurred  in 
the  suit  upon  the  Auditor's  bond  and  not  to  the  investigation  of 
the  affairs  of  the  office. 

A  large  part  of  the  sum  recovered  consisted  of  certain  taxes 
collected  by  Mr.  Sherrick,  as  Auditor,  "which  he  had  no  right  to 
receive,  as  the  law  in  plain  terms  required  these  taxes  to  be  paid 
by  the  insurance  companies  "into  the  treasury  of  the  State."  A 
considerable  portion  of  the  sum  recovered  consisted  of  insurance 


35 

fees  which  were  properly  collected  by  the  Auditor.  Six  thousand 
nine  hundred  and  eighty-seven  dollars  and  seven  cents  consisted  of 
miscellaneous  fees  which  the  Auditor  never  reported  to  the  State, 
no  part  of  which  he  had  paid,  and  which  he  had  treated  as  his  own, 
appropriating  them  to  his  own  use  and  directing  his  subordinates  to 
make  no  report  of  them. 

Subsequent  to  his  resignation  Mr.  Sherrick  was  indicted,  tried 
and  found  guilty  of  embezzlement  and  sentenced  and  committed  to 
the  State  Prison.  On  the  16th  day  of  November,  1906,  the  Su- 
preme Court  of  the  State  reversed  the  judgment  of  the  Marion 
Criminal  Court,  in  which  the  case  was  tried,  for  error  of  law  oc- 
curring at  the  trial.  Mr.  Sherrick  is  now  at  liberty  on  bond  pend- 
ing a  retrial  of  the  charge  against  him.  During  his  term  as  Aud- 
itor Mr.  Sherrick  collected  $854,798.89  of  insurance  taxes,  which, 
as  I  have  indicated,  he  had  no  right  to  collect  under  the  law.  He 
misappropriated  and  embezzled  a  large  portion  of  these  funds. 

In  its  decision  the  Supreme  Court  held  that  these  taxes  were  not 
the  property  of  the  State;  that  they  were  collected  without  war- 
rant of  law;  that  in  receiving  them  Mr.  Sherrick  acted  as  the 
agent  of  the  insurance  companies  and  not  as  the  representative  of 
the  State,  and  that  as  to  these  funds  he  was  therefore  not  guilty 
of  embezzling  public  funds. 

The  fact  that  he  embezzled  the  funds  is  without  dispute.  The 
moral  turpitude  of  the  offense  is  not  lessened  by  the  fact  that  the 
court  has  held  that  the  technical  title  to  them  was  in  the  insurance 
companies  and  not  in  the  State. 

It  is  an  unconscionable  miscarriage  of  justice  that  a  public  offi- 
cer charged  by  the  law  with  the  duty  of  receiving  reports  showing 
the  amount  of  taxes  due  from  the  insurance  companies  to  the  State 
and  of  auditing  them,  and  with  the  further  duty  of  bringing  suit 
to  recover  from  the  companies  the  taxes  so  reported  where  they  fail 
to  pay  them  into  the  treasury,  and  who  issues  written  notices  to 
the  representatives  of  such  companies  containing  a  garbled  state- 
ment of  the  law  made  to  read  so  as  to  require  the  payment  of  the 
taxes  to  him,  and  who,  pursuant  to  such  notice,  receives  such  taxes 
from  the  companies  over  the  counter  of  his  office,  receipting  for 
them  as  Auditor  of  State,  should  go  acquit  on  account  of  a  technical 
if  not  fictitious  ownership.  And  that  it  may  never  occur  again  in 
the  State  of  Indiana,  I  recommend  that  you  enact  a  statute  the 
terms  of  which  shall  clearly  make  it  embezzlement  for  any  public 
officer  to  convert  to  his  own  use  money  received  under  color  of  his 
office,  while  acting  under  claim  of  official  authority,  no  matter  in 
whom  the  technical  legal  title  thereto  may  be  held  to  vest. 


36 

A  portion  of  the  funds  embezzled  by  Mr.  Sherrick  consisted  of 
fees  which  he  had  a  legal  right  to  collect.  It  is  upon  this  charge 
that  he  is  now  awaiting  retrial. 

In  its  investigation  the  committee  found  inaccuracies,  in  the 
way  of  overdrafts,  in  the  accounts  of  the  Adjutant-General,  John 
R.  Ward,  running  from  May  19,  1903,  to  January  6,  1905,  and 
aggregating  $976.75.  The  overdrafts  were  due  to  incorrect  foot- 
ings in  the  column  containing  a  summary  of  the  totals  of  the  pay 
rolls  of  the  several  National  Guard  companies  appearing  on  the 
last  page  of  the  voucher  prepared  for  the  approval  of  the  Governor 
and  for  presentation  to  the  Auditor.  The  company  totals  in  each 
instance  were  made  up  from  the  bills  filed  with  the  voucher,  and 
were  correct.  They  were  also  properly  entered  on  the  last  sheet  in 
the  summary  column.  The  footings  or  totals  in  this  last  column 
were  found  to  be  excessive  in  sixteen  instances.  Upon  receipt  of 
the  evidence  in  the  case  I  demanded  the  immediate  resignation  of 
Mr.  Ward  and  the  payment  of  the  sum  of  the  overdrafts.  The 
demand  for  his  resignation  was  promptly  complied  with,  and  the 
overdrafts  were  paid  within  a  few  days  thereafter.  General  Oran 
Perry  was  appointed  to  the  vacancy  occasioned  by  the  resignation 
of  General  Ward.  Acting  under  executive  direction  he  made  a  care- 
ful examination  of  the  accounts  and  books  of  the  Adjutant-Gen- 
eral's office,  with  the  result  that  an  additional  shortage  was  discov- 
ered aggregating  $533.69.  This  also  has  been  repaid  and  re- 
turned to  the  proper  funds  in  the  hands  of  the  Adjutant-General. 
The  sum  of  money  returned  to  the  State  by  General  Ward  is 
$1,510.44. 

Inaccuracies  in  the  reports  made  to  the  Auditor  of  State  by  Sec- 
retary of  State  Daniel  E.  Storms,  discovered  by  the  committee,  led 
subsequently  to  the  disclosure  of.  the  fact  that  the  Secretary  had 
sequestered  fees  due  to  the  State  and  misapplied  certain  funds  ap- 
propriated to  the  office  of  Secretary  of  State  for  public  purposes, 
by  converting  them  to  his  own  use.  The  committee  was  imme- 
diately directed  to  examine  the  books  and  accounts  of  the  office  of 
Secretary  of  State,  but  upon  appearing  at  the  office  to  take  up  the 
work  they  were  refused  permission  to  examine  or  see  any  of  the 
books  or  accounts  of  the  office.  The  Executive  then  addressed  to 
the  Secretary  a  demand  in  writing  for  full  information  touching 
the  condition  of  the  affairs  of  the  office  of  the  Secretary  of  State. 
This  the  Secretary  declined  to  give.  Thereupon  the  Attorney-Gen- 
eral, assisted  by  eminent  counsel  employed  by  the  Governor  for  that 
purpose,  brought  suit  in  the  Superior  Court  of  Marion  County  to 


37 

remove  the  Secretary  from  office,  charging  him,  under  the  oath  of 
the  Executive,  with  the  embezzlement  of  public  funds  and  malfeas- 
ance in  office. 

The  statute  under  which  the  proceeding  was  brought  was  held 
invalid  by  the  court.  Having  failed  in  the  courts  to  secure  the 
removal  of  the  Secretary,  the  Executive  was  about  to  convene  the 
Sixty-fourth  General  Assembly  in  special  session,  for  the  purpose 
of  asking  his  impeachment,  when  he  resigned.  The  committee 
immediately  took  possession  of  the  books  and  accounts  in  the  office 
and  made  a  careful  examination  of  the  same  for  the  period  of  Mr. 
Storms'  incumbency.  The  report  of  the  committee  shows  in  detail 
the  condition  found. 

The  misappropriation  of  funds,  conversion  of  fees  and  appro- 
priations made  by  the  General  Assembly  amounted  to  $4,583.50, 
interest  upon  which  at  the  time  of  the  retirement  of  Mr.  Storms 
amounted  to  $3,556.35,  a  total,  principal  and  interest,  of 
$8,139.85.  The  sum  was  paid  in  full  to  the  Treasurer  of  State 
April  1,  1906,  the  date  of  the  Secretary's  retirement. 

Errors  in  computing  the  tax  statements  of  certain  foreign  in- 
surance companies  occurring  during  the  administration  of  Mr. 
Sherrick  were  discovered,  amounting  to  $689.79.  Upon  demand 
this  sum  was  paid  into  the  treasury  by  the  companies  owing  the 
same. 

Conditions  discovered  in  the  Auditor's  office  led  the  Executive  to 
instruct  the  committee  to  examine  the  accounts  and  books  of  the 
office  back  to  1872.  The  results  of  the  investigation  are  set  forth 
in  the  committee's  report  and  are  such  as  to  abundantly  justify  the 
executive  direction  under  which  they  acted. 

A  discrepancy  in  the  accounts  of  General  M.  D.  Manson  as 
Auditor  of  State  was  discovered,  amounting  to  $347.50,  which  was 
evidently  due  to  errors  inadvertently  made. 

James  H.  Rice,  while  Auditor  of  State,  collected  and  retained 
insurance  taxes  in  the  sum  of  $11,418.50  and  reciprocal  fees  due 
the  State  in  the  sum  of  $36,650.24.  These  sums,  together  with 
interest  thereon  to  April  1,  1906,  amount  to  $108,877.74.  This 
sum  represents  the  claim  of  the  State  against  Mr.  Rice,  exclusive 
of  statutory  penalties.  The  ex- Auditor  is  dead.  I  am  advised 
that  his  estate  is  insolvent.  The  statute  of  limitations  bars  a  suit 
upon  his  bond.  So  far  as  he,  his  estate  or  his  bondsmen  are  con- 
cerned, this  entire  sum  is  lost  to  the  State. 

The  law,  however,  required  foreign  insurance  companies  doing 
business  in  the  State  of  Indiana  to  pay  into  the  treasury  of  the 


State  the  taxes  they  erroneous1  •,  paid  Mr.  Rice,  amounting,  princi- 
pal and  interest,  to  $26,091.27.  Payment  to  him  in  defiance  of  the 
provisions  of  the  law  was  not  payment  to  the  State.  Proceed  in <>; 
upon  this  theory,  investigation  was  made  and  the  names  of  the  com- 
panies making  the  erroneous  payments  and  the  amount  due  from 
each  were  ascertained  and  notice  served  upon  them  that  payment 
must  be  made  by  the  10th  day  of  November,  1906,  together  with  6 
per  cent,  interest  thereon,  or  their  license  to  do  business  in  the  State 
would  be  revoked  and  suit  instituted  to  collect  the  amounts  due. 
On  November  11,  1906,  settlement  was  made  by  all  but  two  or  three 
of  the  companies.  The  amount  paid  into  the  State  treasury  was, 
principal,  $9,755.78^interest,  $12,997.24,  total,  $22,753.02.  This 
leaves  a  balance  of  $3,388.25.  Some  of  the  companies  owing  this 
balance  ceased  years  ago  to  do  business  in  the  State  and  others  are 
insolvent. 

It  appears  from  the  report  of  the  committee  that  Bruce  Carr, 
while  Auditor  of  the  State  of  Indiana,  unlawfully  retained  $34,- 
259  of  regular  fees  and  $40,040  of  reciprocal  fees  which  lawfully 
belonged  to  the  State,  a  total  of  $74,569.  Interest  thereon  to 
April  1,  1906,  at  6  per  cent.,  aggregates  $75,998.24,  making  the 
total  claim  of  the  State  $151,470.92.  None  of  the  funds  misap- 
propriated by  Mr.  Carr  were  insurance  taxes.  Mr.  Carr  is  dead. 
His  estate,  as  I  am  advised,,  is  insolvent,  and  the  statute  of  limita- 
tions bars  suit  upon  his  bond.  This  sum  is,  therefore,  lost  to  the 
State. 

J.  O.  Henderson,  as  Auditor  of  the  State  of  Indiana,  collected 
and  retained  insurance  taxes,  regular  fees  and  reciprocal  insurance 
fees  aggregating  $49,616.45.  Interest  thereon  to  March  1,  1906. 
aggregates  $42,345.96,  which,  with  the  penalty  of  10  per  cent, 
imposed  by  the  statute,  equals  $101,158.65.  This,  in  the  judg- 
ment of  the  Executive,  constitutes  a  valid  claim  against  Mr.  Hen- 
derson. Acting  upon  that  assumption  the  Attorney-General  has 
brought  suit  in  the  Superior  Court  of  Marion  County  to  recover 
the  same. 

The  report  also  shows  that  A.  C.  Daily,  as  Auditor  of  the  State 
of  Indiana,  collected  and  retained  insurance  taxes  amounting  to 
$13,511.57.  Interest  thereon  to  March  6,  1906,  aggregates 
$8,054.33.  Mr.  Daily  also  failed  to  pay  into  the  treasury  of  the 
State  other  moneys  due  the  State  at  the  time  specified  by  the  law. 
Interest  upon  such  deferred  payments  to  March  6,  1906,  aggre- 
gates $2,101.84.  These  sums,  together  with  the  penalty  of  10 
per  cent,  imposed  by  law,  amount  to  $26,034.51.  Believing  this 


39 

sum  claimed  against  Mr.  Daily  to  be  a  valid  claim  in  favor  of  the 
State,  the  Executive  instructed  the  Attorney-General  to  proceed  to 
collect  it.  He  accordingly  brought  suit  in  the  Boone  Circuit  Court 
and  recovered  therein  a  judgment  in  the  sum  of  $25,435.50.  Mr. 
Daily  appealed  from  this  judgment,  and  the  case  is  now  pending  in 
the  Appellate  Court. 

The  aggregate  collections  already  made  from  delinquent  offi- 
cers and  insurance  companies  is  shown  in  the  following  statement : 

David  E.  Sherrick,  Auditor  of  State $156,367  31 

Daniel  E.  Storms,  Secretary  of  State   8,139  85 

John  R.  Ward,  Adjutant-General  1,510  44 

Insurance  companies    689  79 

Insurance  companies    22,753  03 


Total  $189,460  41 

Valid  claims  still  pending: 

A.  C.  Daily,  Auditor  of  State  (judgment) $25,435  50 

J.  O.  Henderson,  Auditor  of  State 101,158  65 


Total $126,594  15 

The  entire  cost  of  the  investigation,  including  the  insurance  de- 
partment, was  $13,258.29. 

From  a  money  standpoint  alone  no  better  expenditure  of  public 
funds,  viewed  from  the  amount  actually  recovered  and  returned  to 
the  treasury,  has  been  made  in  Indiana  for  many  years.  But  the 
commission's  work  did  not  stop  with  the  recovery  of  these  funds. 
The  moral  effect  of  the  investigation  it  made  and  of  the  facts  which 
have  become  public  will  continue  to  be  of  value  for  years  to  come. 

There  is  now,  and  there  has  been  for  years,  a  lack  of  check 
upon,  supervision  of  and  examination  into  the  accounts  and  the 
affairs  of  the  administrative  offices  of  the  State  without  parallel  or 
precedent  in  private  business  of  like  magnitude.  The  lack  of  this 
has  made  it  possible  for  men  in  high  offices  to  abuse  their  trust,  to 
sequester  and  appropriate  to  their  own  use  fees  belonging  to  the 
public,  without  the  facts  thereof  coming  to  the  knowledge  of  the 
public.  This  was  true  for  months  in  the  case  of  the  Auditor  and 
Secretary  who  were  removed,  and  with  a  single  exception  it  has  been- 
long  true  in  the  administration  of  the  office  of  Auditor  of  State. 
Through  the  commission  the  administration  has  uncovered  the  sys- 
tem, exposed  its  weakness  and  laid  bare  its  corrupting  and  ruinous 
effects. 

The  law  requires  an  official  making  a  demand  for  compensation 


40 

for  services  rendered  to  point  to  some  statute  which  clearly  author- 
izes both  the  service  and  the  compensation  claimed.  Under  the  sys- 
tem so  long  in  vogue  this  just  and  wholesome  rule  of  law  has  been 
reversed.  Every  doubt  has  been  solved  against  the  State  and  in 
favor  of  the  official,  and  in  some  instances  fees  have  been  sequestered 
and  appropriated  to  private  use  in  violation  of  the  positive  letter 
of  the  statute.  Both  the  system  and  the  corrupting  practices  un- 
der it  have  been  nonpartisan  from  the  beginning.  With  a  single 
exception,  change  of  administration  from  one  party  to  the  other 
did  not  interrupt  either  the  system  or  its  abuses.  Honest  officials 
of  either  party  were  not  harmed,  but  weak  men  of  both  parties  fell 
before  the  temptations  to  private  gain  which  the  system  presented 
and  dishonest  ones  reveled  in  the  opportunities  it  offered  for  pecula- 
tion and  plunder.  The  effect  has  been  as  nonpartisan  as  the  sys- 
tem. Thousands  of  dollars  of  public  revenue  have  gone  into  the 
pockets  of  officials,  republican  and  democratic,  and  the  people  have 
paid  without  regard  to  party  affiliation.  Some  of  these  misappro- 
priations of  public  revenues  were  permitted  to  sleep  for  years  with- 
out exposure. 

The  facts  I  bring  to  your  attention  have  convinced  me  of  the 
necessity  of  a  law  authorizing  the  Governor  to  appoint  an  executive 
accountant,  whose  duty  it  shall  be  to  make  frequent  examinations 
of  the  accounts  and  books  of  the  several  administrative  offices  of 
the  State  and  of  the  several  State  institutions  under  executive  direc- 
tion. The  salary  ought  to  be  such  as  to  command  the  services  of 
a  competent  accountant.  Such  a  law  would  have  saved  to  the 
State  many  thousands  of  dollars  in  the  past  and  will  save  to  it  many 
thousands  of  dollars  in  the  future.  It  is  not  enough  to  expose  the 
system  and  lay  bare  its  evils.  We  must  put  an  end  to  it  abso- 
lutely. 

The  general  statute  covering  the  several  administrative  offices 
of  the  State  requires  some  of  them  to  make  annual  and  some  semi- 
annual settlements  with  the  Auditor  and  to  pay  into  the  treasury  the 
moneys  in  their  hands  belonging  to  the  State.  For  a  number  of 
years  each  appropriation  act  passed  by  successive  General  Assem- 
blies has  provided  for  quarterly  settlements  with  the  Auditor  and  the 
payment  of  the  money  in  the  hands  of  the  several  officers  due  the 
State,  into  the  treasury,  and  that  the  salary  of  no  officer  who  failed 
to  comply  with  such  provision  should  be  paid  until  settlement  with 
the  Auditor  and  payment  to  the  treasury  of  the  moneys  in  his 
hands.  This  requirement  of  the  law  had  been  ignored  by  all  the 
officers  until  the  present  Executive  required  compliance  therewith. 


41 

Since  October,  1905,  all  such  settlements  and  payments  have  been 
made  quarterly. 

The  recommendations  of  the  committee  relating  to  the  auditing 
department  of  the  office  of  Auditor  of  State  and  the  general  fiscal 
affairs  of  the  State  contain  many  thoughtful  and  timely  sugges- 
tions which  I  commend  to  your  consideration  with  the  hope  that 
legislation  may  be  enacted  to  meet  the  needs  suggested. 

SEPARATE    DEPARTMENT    FOR    INSURANCE. 

The  need  of  a  separate  department  for  the  supervision  of  in- 
surance is  so  apparent  and  of  such  urgent  character  as  to  preclude 
debate  or  delay.  The  department,  as  now  organized,  is  no  more 
than  a  neglected  adjunct  of  the  Auditor's  office.  This  office  is  over- 
whelmed by  the  multitude  of  duties  and  demands,  infinite  in  nature 
and  variety,  devolved  upon  it.  The  Legislature  and  not  the  Auditor, 
however,  is  to  be  criticised.  With  the  means  now  provided  the 
Auditor  cannot  make  it  other  than  it  is — a  neglected  adjunct. 
With  a  beggarly  allowance  of  $5,920  for  the  entire  department, 
he  is  expected  to  administer  a  department  having  supervision  of 
18  legal  reserve  life  insurance  companies,  16  assessment  life  in- 
surance companies,  9  fraternal  life  insurance  companies,  7  fire  in- 
surance companies  and  3  casualty  companies,  a  total  of  53,  organ- 
ized under  the  laws  of  and  domiciled  in  Indiana  and  carrying  hun- 
dreds of  millions  of  dollars  of  insurance.  To  the  supervision  of 
these  is  to  be  added  the  supervision  of  49  legal  reserve  life  insur- 
ance companies,  125  fire  insurance  companies,  41  casualty  com- 
panies, 37  fraternal  insurance  companies  and  19  assessment  com- 
panies, a  total  of  271,  organized  under  the  laws  of  other  States  and 
doing  business  in  the  State  of  Indiana — a  grand  total  of  324. 

These  324  companies  last  year  collected  in  premiums  from  the 
people  of  Indiana  the  sum  of  $23,073,815.41.  The  securities  en- 
trusted to  the  care  of  the  department,  under  the  law,  have  a  face 
value  of  $8,963,000.  They  are  subject  to  frequent  change  and 
substitution.  Their  acceptance  and  care  require  skill  and  legal 
knowledge  and  unqualified  integrity  as  well. 

The  fees  collected  by  this  department  for  the  year  1905  aggre- 
gated $66,553.21,  and  for  this  year  $72,660.  The  insurance 
taxes  collected  for  the  year  1905  aggregated  $303,786.16. 

It  is  simply  impossible  to  secure  effective  administration  of  such 
a  department  with  the  allowance  made.  The  department  is  entitled 
to  stand,  and,  if  properly  organized,  will  stand  as  a  barrier  between 
the  people  of  the  Commonwealth  and  the  horde  of  graveyard  insur- 


42 

ance  companies,  funeral  benefit  societies  and  various  wild,  visioii- 
arj  concerns  and  criminal  speculative  organizations  that  are  con- 
tinuously organizing  and  storming  the  department  for  the  privi- 
lege of  duping  the  citizens  of  the  State  and  preying  upon  civdulil  v« 
sorrows  and  misfortune. 

In  this  connection,  I  cannot  do  better  than  to  quote  from  the 
report  of  the  investigating  committee  relative  to  the  insurance 
department,  heretofore  adverted  to: 

"The  intricate  character  of  insurance  business  demands  that  a  strong  de- 
partment should  stand  between  the  companies  and  the  insuring  public.  The 
agent  goes  to  the  prospective  insurer  with  a  contract  which  has  been  carefully 
worked  out  by  experts,  and  in  which  the  rates  and  guaranteed  values  have  been 
prepared  by  educated  actuaries,  looking  alone  to  the  value  and  safety  of  the 
contract  to  the  company.  The  proposition  in  its  simplest  form  involves  many 
matters  with  which  the  average  policy  holder  cannot  become  familiar.  He  is 
at  a  serious  disadvantage.  He  appreciates  the  need  and  importance  of  insur- 
ance, but  cannot  work  out  its  intricate  details.  There  should  be  a  strong  de- 
partment to  stand  between  him  and  the  company  so  as  to  insure  the  public 
that  any  contracts  offered  by  companies  doing  business  in  the  State  of  In- 
diana are  honest  and  fair.  The  policy  holder  should  know  that  he  is  pro- 
tected by  the  State  against  deception,  subterfuge  and  trickery  when  he  appro- 
priates his  money  to  this  sacred  sort  of  use.  The  policy  holder  should  be  able 
to  feel  that  any  contract  offered  him  by  an  agent  licensed  by  the  State  of 
Indiana  will  afford  him  and  his  beneficiaries  a  square  deal. 

The  rapidity  of  the  growth  of  the  business  of  insurance  companies  * 
in  the  State  of  Indiana  within  the  last  ten  years  is  so  remarkable  in  volume 
and  in  income  to  the  State  that  it  warrants  preparation  on  the  part  of  the 
State  for  its  careful  regulation  in  order  that  far-reaching  disasters  may  be 
averted  as  fully  as  can  be  done  by  governmental  regulation.  It  means  protec- 
tion to  the  family  and  fireside  in  nearly  as  important  a  sense  as  do  police  and 
fire  protection  or  the  regulation  of  banking  by  the  State  or  national  govern- 
ments." 

Speaking  in  relation  to  the  insurance  revenues  accruing  to  the 
State,  the  committee  well  says: 

"The  people  of  the  State  are  entitled  to  have  an  efficient  department  main- 
tained out  of  this  money  that  is  raised  especially  for  the  purpose  of  supervis- 
ing the  business  of  insurance.  There  is  no  reason  that  so  large  a  proportion 
should  be  diverted  to  the  general  fund  of  the  State,  and  at  the  same  time  per- 
mit the  work  for  which  such  fund  is  provided  to  go  undone  or  poorly  done. 
The  companies  themselves  have  a  right  to  demand  that  the  moneys  paid  for 
supervision  of  the  department  shall  be  applied  in  large  part  to  that  purpose, 
and  not  diverted  at  the  expense  of  good  management  of  the  department.  They 
have  a  right  to  require  that  such  supervision  should  be  given  to  the  business 
of  insurance  as  to  exclude  illegal  or  fraudulent  competition  in  the  field  of  their 
business,  and  to  know  that  an  efficient  department  is  protecting  the  insuring 
public  from  deception  and  fraudulent  devices  and  representations  which  permit 
wild-catting  concerns  to  secure  business  that  would  legitimately  go  to  com- 
panies who  would  treat  their  patrons  fairly  and  honestly." 


In  this  connection,  I  quote  further  from  the  committee's  report: 

"It  is  needless  to  say  that  the  office  force  above  indicated  is  inadequate 
to  such  a  degree  as  to  warrant  our  saying  that  the  business  of  the  office  cannot 
be  performed  in  a  safe  and  creditable  manner.  The  supervision  of  the  business 
of  insurance  involves  a  high  degree  of  expert  knowledge,  and  in  addition  calls 
for  the  most  careful  mathematical  work  and  voluminous  records  which  should 
be  kept  with  great  detail.  The  department  is  called  upon  to  keep  itself  in- 
formed of  the  solvency  and  methods  of  business,  not  only  of  the  53  companies 
operating  under  Indiana  laws,  but  of  the  271  foreign  companies  doing  business 
of  insurance  in  this  State." 

Continuing,  the  report  declares  : 

"We  find  the  Department  of  Insurance  without  an  appropriation  of  a"  sin- 
gle dollar,  outside  of  salaries,  except  as  it  shares  in  the  small  appropriation 
for  office  expense.  There  is  not  a  dollar  available  for  the  examination  or  in- 
vestigation of  companies  which  may  be  doing  business  without  assets  with 
which  to  pay  the  expense  of  such  investigation.  Nor  is  there  any  provision 
for  the  examination  of  companies  which,  after  such  examination,  may  retire 
from  the  State  and  refuse  to  pay  the  expense  of  an  investigation  which,  at  the 
same  time,  inures  to  the  benefit  of  the  State.  There  is  absolutely  no  provision 
for  any  additional  clerical  help  in  times  of  great  emergency  or  of  unusual  work. 
The  statutes  fail  to  require  certain  classes  of  Indiana  insurance  companies 
to  pay  the  expenses  of  examinations,  except  when  such  examinations  are  made 
upon  the  motion  of  the  company  itself.  The  department  would  have  been 
unable  to  have  made  its  examination  of  The  State  Life  Insurance  Company, 
The  State  Agency  Company,  and  other  such  associations,  and  would  have 
been  utterly  unable  to  have  engaged  in  this  investigation,  except  that  the 
Governor  provided  for  the  expense  thereof  out  of  his  emergency  contingent 
fund.  Neither  could  the  Auditor  have  made  examination  of  such  voluntary 
associations  as  The  French  Lick  and  West  Baden  Hotel  Companies  without 
the  aid  of  the  Governor's  fund.  Such  neglect  of  the  department  has  gone  far 
toward  making  it  impotent  and  helpless. 

"We  would  here  call  attention  to  the  fact  that  the  actuary  of  the  depart- 
ment is  paid  the  very  small  salary  of  $2,000  per  annum.  No  competent 
actuary  will  give  his  exclusive  service  for  any  such  compensation,  and  the 
actuary  of  this  department  admits,  and  it  is  publicly  known,  that  he  has  been 
frequently  in  the  employment  of  companies  doing  business  in  Indiana,  as  con- 
sulting actuary,  a  relation  which  no  official  should  be  permitted  to  maintain 
with  the  companies  whose  business  he  is  expected  to  examine  critically  and 
to  reform  if  necessary.  It  is  our  belief  that  Actuary  Buttolph  is  a  gentleman 
of  fine  integrity  and  much  ability,  but  we  believe  that  the  continuance  of  such 
relations  with  the  companies  by  the  actuary  of  the  department  is  absolutely 
inconsistent  with  his  official  duties,  and  while  no  wrong  may  have  been  com- 
mitted, the  relation  itself  is  subject  to  severe  criticism. 

"We  are  reliably  informed  that  the  actuaries  appointed  by  the  depart- 
ments of  some  other  States  engage  in  outside  business  as  consulting  actuary, 
and  are  often  employed  by  the  companies  whose  business  they  are  required  to 
inspect  in  the  course  of  their  official  duties.  The  fact  that  the  relation  exists 
elsewhere  cannot  justify  it  here.  The  State  of  Indiana  can  afford  to  maintain 
an  independent  department.  A  competent  actuary  cannot  give  his  exclusive 


44 

services  to  the  State  for  the  salary  that  is  now  paid.  The  State,  if  it  continues 
the  present  appropriation  for  the  payment  of  an  actuary,  must  be  satisfied 
with  an  incompetent  actuary  or  permit  him  to  engage  in  employment  which 
is  calculated  to  mitigate  his  alertness  and  zeal  when  engaged  in  the  critical 
inspection  of  the  business  reported  to  the  department  by  companies  who,  at 
other  times,  consult  him  in  the  relation  of  client. 

"As  a  result  of  the  inadequate  care  of  this  department  the  growing  In- 
diana companies  have  not  received  the  restraint  of  a  well-organized  insurance 
department  which  would  have  undoubtedly  prevented  some  of  the  abuses  which 
have  grown  up  in  their  business  and  which,  while  not  destroying  them,  have 
encumbered  some  of  the  companies  with  assets  of  a  character  which  will  many 
times  embarrass  them  in  the  future,  and  a  class  of  liabilities  which  for  many 
years  will  be  an  illegitimate  drain  on  the  expense  fund  of  the  company.  * 

"The  lack  of  inspection  of  the  mortgage  loans  on  deposit  was  apparent 
from  the  fact  that  in  many  cases  hereafter  described  no  abstracts  were  present, 
insurance  policies  were  often  missing  in  cases  which  required  their  presence, 
abstracts  often  showed  prior  mortgages  and  liens,  and  in  many  other  respects 
the  mortgage  papers  were  deficient  in  matters  which  would  have  been  dis- 
covered by  the  most  careless  inspection.  There  was  no  attempt  on  the  part  of 
the  department  to  keep  informed  as  to  whether  interest  on  mortgage  loans  was 
being  met  or  whether  the  same  was  in  default. 

"The  care  of  what  are  known  as  policy  loans  has,  of  necessity,  been  negli- 
gent in  the  extreme.  These  so-called  securities  have  been  kept  in  files  accessible 
to  anybody  and  everybody,  and  it  has  come  under  the  observation  of  the  com- 
mittee that  messengers  from  the  insurance  companies  have  gone  to  the  files 
of  these  securities  and  made  such  changes  as  they  pleased,  removing  or  re- 
placing instruments  and  perhaps  doing  no  more  than  to  leave  a  memorandum 
on  the  desk  of  the  clerk.  A  mischievous  person  could  remove  enough  of  such 
securities  in  his  coat  pocket  to  seriously  embarrass  the  department  and  work 
injury  to  the  company.  The  displacement  of  a  handful  of  policy  cards  or  loan 
cards  would  change  the  showing  of  assets  and  liabilities  of  a  company  by 
many  thousands  of  dollars.  The  clerk  has  neither  the  data  nor  the  knowledge 
from  which  to  test  the  validity  of  the  loans  and,  consequently,  the  companies 
offer  for  deposit  many  loans  which  lack  the  legal  requirements,  as  evidenced 
by  the  fact  that  this  committee  caused  to  be  rejected  nearly  $125,000  of  securi- 
ties for  which  the  companies  were  given  credit  without  the  securities  having 
had  such  inspection  as  would  determine  their  right  to  be  deposited.  The  fact 
that  the  securities  on  deposit  with  the  Auditor  are  found  in  as  good  condi- 
tion as  the  committee  found  them  is  due  to  the  fact  that  the  companies  have 
shown  unusual  fairness  in  dealing  with  the  office,  and  not  to  the  fact  that 
there  has  been  any  kind  of  efficient  inspection.  The  organization  of  the  office 
has  been  such  as  to  render  it  impossible." 

Consideration  of  these  facts  lead  inevitably  to  the  conclusion 
that  a  law  should  be  enacted  separating  the  insurance  department 
from  the  Auditor's  office  and  creating  an  independent  department 
to  take  over  the  supervision  of  the  business  of  insurance. 

The  department  shottld  be  known  as  "The  Department  of  In- 
surance" and  its  head  as  "The  Commissioner  of  Insurance."  He 


45 

should  be  appointed  by  the  Governor  for  a  term  of  four  years. 
The  supervision  of  such  a  department  calls  for  a  high  order  of  ex- 
ecutive ability.  He  should  be  a  man  of  large  experience,  possessed 
of  courage  and  moral  fibre.  His  salary  should  be  substantial,  not 
less  than  $5,000  nor  more  than  $7,500  per  annum.  He  should  be 
given  a  competent  actuary,  whose  salary  should  be  not  less  than 
$4,000  per  annum,  and  who  should  be  precluded  by  law  from  ta- 
king outside  employment.  There  should  also  be  a  clerk,  having 
charge  of  the  business  of  collecting  fees  and  issuing  licenses. 
There  should  be  provided  a  special  examiner,  whose  business  it 
should  be  to  examine  the  financial  statements  made  by  the  insurance 
companies.  He  should  be  a  man  of  sagacity  and  experience,  ca- 
pable of  detecting  questionable  items  in  the  statements  filed,  wrong 
classifications  of  business,  or  subterfuge  of  any  kind.  This  is  ab- 
solutely essential  if  the  public  is  not  to  be  imposed  upon.  The 
salary  should  be  not  less  than  $3,000.  There  should  be,  also,  a 
clerk  possessed  of  legal  training,  whose  business  it  should  be  to  take 
charge  of  the  securities  on  deposit  with  the  Auditor,  to  keep  the 
records  of  the  same,  to  examine  each  and  every  security  as  to  its 
value,  correctness  of  form  and  compliance  with  legal  requirements. 
He  should  be  acquainted  with  the  ordinary  requisites  of  mortgages 
and  municipal  bonds  and  should  have  legal  capacity  to  pass  upon 
the  validity  of  securities  known  as  policy  loans.  The  commissioner 
should  be  given  a  stenographer,  and  a  special  appropriation  should 
be  made  for  the  making  of  examinations  in  cases  in  which  the  ex- 
pense thereof  cannot  be  collected  from  the  company. 

The  report  of  the  committee  investigating  the  affairs  of  the  in- 
surance department  of  the  Auditor's  office  has  been  prepared  with 
rare  skill  and  great  ability,  and  I  commend  it  to  your  most  thought- 
ful consideration  in  connection  with  this  subject. 

The  newr  department  is  absolutely  essential  to  the  public  wel- 
fare, and  I  sincerely  trust  this  recommendation  will  receive  your 
early  approval.  The  form  of  other  insurance  legislation  will  neces- 
sarily depend  to  some  extent  upon  the  creation  of  this  department, 
and  for  that  reason  whatever  legislation  you  enact  providing  for 
its  establishment  should  be  among  your  first  enactments. 

FRENCH    LICK    AND    WEST    BADEN. 

For  a  number  of  years  an  incorporated  company  known  as  the 
French  Lick  Hotel  Company,  and  a  similar  company  known  as  the 
West  Baden  Hotel  Company,  have,  respectively,  owned  and  oper- 
ated large  hotels  at  French  Lick  and  West  Baden.  In  connection 


4(5 

with  the  hotels,  buildings  have  been  erected  and  devoted  to  use  as 
casinos.  These  casinos  have  been  equipped  with  many  elaborate 
and  expensive  gambling  devices.  Gambling  has  been  carried  on 
therein  to  such  an  extent  as  to  constitute  them  veritable  Monte 
Carlos.  This  has  been  done  directly  by  the  companies,  or,  under 
lease  from  them,  with  their  knowledge  and  connivance.  Conditions 
became  such  as  to  shame  the  State.  Many  of  its  citizens  were  de- 
spoiled in  purse  and  debauched  in  habit.  Public  officials  holding 
high  positions  and  having  the  custody  of  public  funds  gambled 
them  away.  Women  and  children  were  nightly  attendants.  Local 
authorities  were  corrupted  until  they  would  not  interfere.  It 
seemed  to  me  the  condition  warranted  executive  action.  The  At- 
torney-General, in  connection  with  the  prosecuting  attorney  of  the 
local  judicial  circuit,  were  directed  to  raid  the  casinos  and  seize  the 
gambling  paraphernalia,  and  to  institute  suit  against  the  hotel 
companies  to  enjoin  the  further  operation  of  the  casinos.  These  in- 
structions were  carried  out  with  vigor  and  ability.  The  casinos 
were  raided  and  thousands  of  dollars  of  gambling  paraphernalia 
seized  and  a  suit  instituted  for  injunctive  relief.  The  Circuit  Court 
of  Orange  County  held  that  the  State  had  no  authority  to  inter- 
vene in  the  premises  and  sustained  a  demurrer  to  its  complaint. 
Appeal  has  been  taken  from  the  decision  of  the  court,  and  the 
case  is  now  pending  in  the  Supreme  Court  of  the  State.  If,  in 
the  decision  of  this  case,  the  Supreme  Court  sustains  the  action  of 
the  lower  court,  the  welfare  of  the  State  will  require  such  legisla- 
tion at  your  hands  as  will  clothe  the  State  with  effective  powers  in 
such  cases. 

Under  the  present  statute  the  gambling  paraphernalia  seized 
by  the  State  cannot  be  destroyed  until  there  is  a  conviction  of  the 
persons  in  whose  possession  it  was  found.  Criminal  proceedings 
have  been  instituted  and  are  still  pending  in  the  local  courts  of 
Orange  County,  but,  so  far,  the  State  has  been  unable  to  bring 
these  cases  to  trial.  The  statute  ought  to  be  amended  so  as  to 
authorize  the  destruction  by  five  of  all  such  paraphernalia  wherever 
found,  summarily  and  without  trial. 

REMOVAL,   OF    PUBLIC    OFFICERS. 

The  French  Lick  and  West  Baden  cases,  and  the  experience  of 
the  State  in  its  effort  to  remove  the  late  Secretary  of  State,  disclose 
the  need  of  a  well-considered  and  effective  statute  for  the  removal 
of  public  officials  who  wilfully  fail  in  the  performance  of  the 
duties  of  their  office,  or  who  are  guilty  of  misfeasance  or  mal- 
feasance therein.  The  present  statute  is  believed  to  be  invalid. 


47 

The  Governor  of  the  State  is  charged  by  the  Constitution  with 
the  faithful  enforcement  of  the  laws  of  the  State.  Under  the  law 
he  cannot  act  effectively  except  through  local  officials.  He  has 
no  authority  to  direct  the  action  of  any  county  sheriff  or  prose- 
cuting attorney  in  any  case.  It  is  not  clear  that  the  Attomey- 
General  has  authority  to  proceed  in  any  such  case  as  that  presented 
at  French  Lick  and  West  Baden  without  the  approval  and  assist- 
ance of  the  prosecuting  attorney.  It  is  unjust  as  it  is  idle  to 
charge  the  Executive  with  the  enforcement  of  the  law,  and  then 
leave  him  without  effective  means  to  discharge  the  duty  imposed. 

RAILROAD   COMMISSION. 

The  act  of  the  Sixty-fourth  General  Assembly  creating  a  State 
Railroad  Commission  has  more  than  justified  its  enactment.  Some 
of  its  provisions  are  imperfect  and  others  almost  wholly  inefficient, 
but  the  commission  has  been  able  to  render  signal  service  to  the 
people  in  many  cases,  notwithstanding  the  weakness  of  the  law 
under  which  it  has  worked.  In  some  instances  of  flagrant  wrong, 
it  has  had  no  power  to  enforce  its  findings,  but  it  has  been 
able,  even  in  such  cases,  to  do  something.  It  has  exposed  the 
abuse  to  the  public  eye,  fixed  the  responsibility  and  laid  bare  the 
need  of  a  more  effective  statute.  If  the  present  act  is  upheld  by 
the  courts  changes  in  the  law  should  be  made  by  amendment  and 
not  by  ne\v  and  independent  legislation. 

The  law  should  be  strengthened  in  many  particulars,  giving  the 
commission  additional  powers  in  cases  of  railroad  and  interurban 
crossings,  interlocking  switches,  physical  defects  of  ways  and 
means,  the  requirement  of  safety  appliances  in  intra-state  traffic, 
the  removal  of  blockades  upon  proper  notice  by  orders  concerning 
rates,  routes  of  shipment  and  the  movement  of  traffic. 

The  provisions  of  the  law  authorizing  an  appeal  from  the  find- 
ing of  the  commission  to  the  Appellate  Court,  should  be  amended 
by  substituting  a  provision  for  the  bringing  of  suit  in  some  nisi 
prius  court  by  any  person  aggrieved  by  the  action  of  the  commis- 
sion, with  the  right  of  appeal  from  the  decision  of  such  court. 
Provision  should  also  be  made  for  the  institution  by  the  commission 
of  suits  in  its  own  name  for  the  enforcement  of  the  law  whenever 
the  public  welfare  shall  require. 

That  defects,  such  as  have  been  pointed  out  by  the  commission, 
in  the  ways  of  some  of  the  railroads  of  the  State,  should  be  con- 
tinued by  the  companies  operating  such  roads,  in  defiance  of  the 
commission  and  in  brutal  disregard  of  the  lives  of  its  employes,  is 
an  intolerable  offense  against  society  and  the  State. 


48 

My  attention  has  been  called  by  the  commission  to  an  instance 
where  a  bridge  constructed  by  a  railroad  company  over  its  tracks 
is  in  such  condition  as  to  constantly  imperil  the  lives  of  its  brake- 
men,  and  at  which  no  less  than  twenty  trainmen  have  been  injured 
or  killed.  This  structure  is  still  being  maintained,  although  it 
could  be  readily  made  safe,  if  the  management  of  the  company  was 
disposed  to  do  it.  Such  conduct  is  little  short  of  criminal.  Power 
should  be  given  the  commission  in  all  such  cases  to  intervene  and 
compel  the  removal  of  the  defects. 

The  coal  blockade  now  existing  in  this  State  is  of  such  magni- 
tude and  has  been  of  such  duration  as  to  seriously  affect  many  in- 
dustries, discommode  many  manufacturers  and  entail  financial  loss 
and  physical  suffering  upon  many  people.  Thousands  of  loaded 
cars  are  permitted  to  stand  unmoved  for  weeks.  Producers  and 
consumers  alike  are  helpless.  The  commission  is  impotent,  and  the 
State  itself  is  powerless  to  act.  The  situation,  taken  in  its  en- 
tirety, is  so  disastrous  and  so  overwhelming  in  its  results  as  to  call 
for  immedate  and  effective  action  upon  your  part. 

While  care  should  be  exercised  that  the  rights  of  the  railroad 
companies  doing  business  in  Indiana  shall  not  be  impaired,  too 
much  time  ought  not  to  be  given,  in  the  presence  of  such  an  emer- 
gency as  that  now  presented  to  you,  to  the  hearing  of  the  special 
interests  which  are  so  deeply  injuring  the  welfare  of  the  State. 

The  particulars  of  the  commission's  work,  the  weaknesses  of  the 
present  law,  and  the  need  of  remedial  legislation  are  so  ably  and  so 
cogently  set  forth  in  the  report  of  the  commission,  filed  with  the 
Executive,  copies  of  which  I  have  caused  to  be  transmitted  to  you, 
that  I  bespeak  for  the  report  your  most  careful  consideration.  So 
far  as  I  am  advised  I  am  in  entire  sympathy  with  the  recommenda- 
tions made  by  the  commission,  and  stand  ready  to  give  them  in- 
stant executive  sanction  upon  receipt  of  measures  from  you  in 
which  they  are  embodied. 

STATE    BOARD    OF    TAX    COMMISSIONERS. 

The  work  coming  before  the  State  Board  of  Tax  Commissioners 
has  grown  so  rapidly  and  has  been  added  to  so  greatly  that  the 
amendment  of  the  law  relating  thereto  has  become  an  imperative 
necessity.  Last  year  this  board  considered  and  assessed  property 
of  the  aggregate  value  of  $224,377,446.  This  property  is  scat- 
tered throughout  the  State,  and  consists  of  the  most  difficult  class 
of  property  to  value  and  assess  known  to  the  law,  such  as  railroads, 
express  companies,  telegraph  companies,  telephone  companies, 
transportation  companies,  pipe  line  companies,  etc.  The  board 


49 

also  has  jurisdiction  over  appeals  from  local  boards  of  review  and 
of  appeals  from  its  own  original  assessments,  and  once  in  four 
years  the  responsibility  of  equalizing  real  estate  values  through- 
out the  State  is  devolved  upon  it.  Under  the  present  law  it  has  but 
forty-five  days  in  which  to  perform  its  work.  I  earnestly  recommend 
an  amendment  of  the  statute,  requiring  the  board  to  begin  its  first 
session  on  the  first  Monday  of  April  of  each  year  and  providing 
that  it  continue  in  session  for  a  period  of  forty  days,  if  the  busi- 
ness before  it  shall  so  warrant.  This  session  should  be  for  the  pur- 
pose of  making  all  original  or  first  instance  assessments  within  the 
jurisdiction  of  the  board.  The  second  session  should  begin  the 
second  Monday  in  July  and  continue  for  a  period  of  fifteen  days. 
This  session  should  be  limited  to  the  hearing  of  appeals  from  the 
assessments  made  by  the  board  at  its  first  session.  The  third  ses- 
sion should  begin  on  the  Thursday  following  the  close  of  the  second 
session,  and  should  continue  for  a  period  of  twenty  days,  if  the 
business  before  the  board  shall  warrant.  This  session  should  be 
devoted  to  the  hearing  of  appeals  from  local  boards  of  review  and 
to  the  equalization  of  the  values  of  real  estate. 

The  work  of  the  tax  commissioners,  apart  from  that  of  the 
board,  has  become  of  so  much  importance  and  has  resulted  in  so 
much  benefit  to  the  State,  in  the  way  of  improved  assessments,  and 
their  pay  is  so  meager,  that  I  believe  it  my  duty  to  recommend  the 
appointment  of  a  third  commissioner  and  that  the  salaries  of  the 
commissioners  be  substantially  increased.  The  increase  in  taxablcs, 
of  $350,000,000,  in  eight  years,  is  very  largely  due  to  the  efforts 
of  the  commissioners.  In  my  judgment  it  would  not  be  unfair  to 
say  that  $150,000,000  of  the  increase  is  due  alone  to  the  improved 
methods  of  valuation  and  the  discovery  of  sequestered  property 
made  possible  by  them.  Their  services  have  been  equally  valuable 
in  bringing  about  uniformity  of  valuation.  With  three  commis- 
sioners the  work  could  be  divided  in  such  manner  as  to  place  a  sec- 
tion of  the  State  under  the  supervision  of  each  commissioner,  and 
the  work,  if  properly  done,  would  require  all  the  time  of  each. 

While  I  am  personally  willing  to  continue  to  serve  the  State 
as  a  member  of  this  board,  my  judgment  is  that  the  Governor 
ought  to  be  relieved  from  membership  on  the  board.  In  the  event 
of  the  appointment  of  a  third  commissioner,  the  board  will  consist 
of  the  Secretary  of  State,  the  Auditor  of  State  and  three  commis- 
sioners. There  is  no  more  important  function  of  the  State  govern- 
ment than  that  devolved  upon  this  board,  and  it  is  quite  impossible 

[4—19891  ] 


50 

for  the  Governor,  in  the  midst  of  the  ever-increasing  executive 
duties  imposed  upon  him,  to  perform  the  character  of  service  as  a 
member  of  the  board  to  which  the  State  is  entitled. 

ASSESSMENT  OF   BANKS. 

Equality  of  valuation  for  purposes  of  assessment  is  essential 
to  just  taxation.  Without  equality  of  valuation  the  burden  of 
taxation  falls  unequally  upon  those  upon  whose  property  the  tax 
is  levied.  This  is  unjust  and  in  clear  contravention  of  the  intent 
of  the  Constitution. 

Under  the  present  law  the  valuation  of  banks,  state  and  na- 
tional, and  of  trust  companies  is  made  by  local  authorities.  From 
wide  observation  and  information  I  am  prepared  to  say  to  you  that 
there  is  no  other  class  of  property  in  the  State  so  unequally  valued. 
In  some  counties  these  institutions  are  assessed  as  low  as  60  per  cent, 
of  the  amount  of  their  capital,  surplus  or  undivided  profits.  Hav- 
ing in  view  the  equality  of  valuation  as  a  fundamental  principle  of 
just  taxation,  I  recommend  that  all  banks,  state,  national  and 
private,  and  all  trust  companies  be  required  to  file  their  reports  for 
taxation  with  the  Auditor  of  State  and  that  the  State  Board  of 
Tax  Commissioners  be  authorized  to  make  the  valuation  of  all 
such  institutions.  Assessment  by  this  board  would  give  uniformity 
of  assessment  of  this  class  of  property  wherever  situate. 

The  act  of  February  28,  1905,  providing  for  the  taxation  of 
the  stock  of  banks  organized  under  the  laws  of  the  United  States 
(Acts  1905,  page  104),  provides  a  method  for  determining  the 
value  of  the  stock  of  national  banks  different  from  the  method 
provided  for  determining  the  value  of  the  stock  of  state  banks,  and 
for  that  reason  it  is  probably  invalid.  It  should  be  repealed.  The 
present  law  providing  for  the  assessment  of  private  banks  is  also 
believed  to  be  unconstitutional.  It,  too,  should  be  repealed.  Pri- 
vate banks  are  now  required  by  law  to  have  a  fixed  and  definite 
capital  invested  in  the  business.  There  should  be  legislation  pro- 
viding that  the  capital  invested  in  any  private  bank  shall  be  di- 
vided into  shares  of  $100  each,  and  that  such  shares  be  returned  for 
valuation  and  assessment  in  the  same  manner  the  shares  of  stock  of 
incorporated  banks  are  returned  for  valuation  and  assessment.  An 
act  providing  for  the  valuation  and  assessment  of  the  shares  of 
capital  or  capital  stock  of  all  banks,  private,  state  and  national, 
and  of  all  trust  companies,  should  receive  your  early  consideration. 
Such  legislation  should  provide  a  method  of  ascertaining  the  actual 
value  of  the  shares  of  capital  invested,  or  of  the  shares  of  capital 


51 

stock,  by  taking  into  consideration  the  market  value  thereof,  as  dis- 
closed by  the  usual  selling  price  at  private  sale  in  the  place  where 
the  institution  is  located ;  the  dividends  paid,  if  any ;  the  surplus 
or  individual  or  undivided  profits,  if  any ;  the  same  as  is  done  with 
respect  to  other  moneyed  capital  in  the  hands  of  individual  citizens 
of  the  State.  If  this  is  done,  all  banking  institutions  will  be  valued 
and  assessed  by  the  same  method  and  all  doubt  as  to  the  validity 
of  the  law  applying  to  their  assessment  will  be  removed. 

Section  27  of  an  act  concerning  taxation,  approved  March  6, 
1891,  being  Section  8437,  Burns'  R.  S.  1901,  has  become  subject 
to  great  abuse  and  should  be  repealed.  It  provides  for  the  taxa- 
tion of  personal  property,  mortgaged  or  pledged,  as  the  property 
of  the  person  who  has  the  same  in  possession.  The  intent  of  the 
law  is  entirely  proper,  but  in  practice  it  results  in  the  sequestration 
of  substantially  all  notes,  bonds,  stocks  and  other  securities  mort- 
gaged to  or  placed  as  collateral  with  the  banks  and  trust  companies 
of  the  State.  Securities  so  mortgaged  or  placed  are  not  taxable 
under  the  statute  to  the  equitable  owner  thereof;  they  are  only 
taxable  to  the  bank  or  trust  company  holding  them.  But  banks 
and  trust  companies  are  assessed  only  upon  their  capital  stock,  sur- 
plus or  undivided  profits.  Collateral  held  by  them  is  never  re- 
ported, and  therefore  never  assessed.  The  abuse  can  be  ended  by 
the  simple  repeal  of  this  section,  the  effect  of  which  will  be  to  leave 
such  property  to  be  assessed  to  its  equitable  owner. 

The  law  relating  to  mortgage  exemptions  in  the  assessment  of 
mortgaged  real  estate  has  also  become  the  subject  of  no  inconsider- 
able abuse.  Mortgages,  fictitious  and  fraudulent,  are  made  the 
basis  of  claims  for  exemption  in  many  instances.  Local  boards  of 
review  now  have  no  authority  to  examine  into  or  pass  upon  these 
claims.  The  mere  filing  of  the  affidavit  with  the  Auditor,  setting 
forth  the  claim,  is  sufficient  to  secure  the  exemption.  The  law 
should  be  amended  so  as  to  require  the  reference  of  all  such  affi- 
davits filed  with  the  Auditor  to  the  county  assessor,  who  should  be 
required  to  examine  the  same  and  to  refer  them,  with  such  recom- 
mendation as  he  may  think  their  merits  warrant,  to  the  county 
board  of  review,  which  board  should  be  given  full  authority  to 
pass  upon  them  and  to  allow  or  disallow  the  claims  made  by  them 
according  as  their  merits  or  the  good  faith  of  the  instruments  in 
question  shall  require.  This  can  be  done  by  the  amendment  of  Sec- 
tion 2  of  the  act  providing  for  mortgage  exemptions. 

The  schedule  of  personal  property  provided  in  the  present  tax 
law  should  be  so  amended  as  to  require  every  person  owning  or 


52 

holding  taxable  notes,  mortgages,  bonds,  or  other  securities  to  write 
into  his  return  an  itemized  statement,  giving  each  note,  mortgage, 
bond  or  other  security,  with  the  amount  of  the  claim  it  evidences 
and  the  name  of  the  obligor.  Each  citizen  should  also  be  required 
to  particularly  specify  in  his  return  all  stock  he  holds  in  any  for- 
eign corporation,  giving  the  amount  of  each  certificate.  A  large 
portion  of  this  class  of  wealth  is  regularly  escaping  taxation.  Un- 
der the  form  of  the  present  schedule  the  citizen  is  simply  required 
to  give  the  gross  valuation  of  all  such  securities.  His  statement 
is  usually  accepted.  If  he  were  required  to  give  the  items,  with 
the  face  value  and  character  of  each,  the  assessing  officer  would  be 
in  a  position  to  intelligently  declare  their  value.  Such  property 
represents  a  form  of  wealth  which  has  reached  enormous  propor- 
tions, and  in  fairness  and  common  honesty  it  should  be  compelled  to 
bear  its  share  of  the  cost  of  administering  the  government  that 
protects  it. 

STATE    BOARD    OF    PARDONS. 

The  clemency  power  of  the  State  is  vested  by  the  Constitution 
in  the  Executive.  While  it  adds  greatly  to  the  burden  of  the  in- 
cumbent of  the  executive  office,  I  believe  the  power  is  wisely  lodged. 
By  an  act  of  the  Sixt3^-third  General  Assembly  a  "State  Board 
of  Pardons"  was  created,  composed  of  three  members,  with  an  an- 
nual salary  of  $300.00,  providing  for  clerk  hire  and  other  ex- 
penses. This  law  makes  it  the  duty  of  the  members  of  this  board 
"to  examine  thoroughly  and  carefully  into  the  merits  of  all  peti- 
tions which  may  be  presented  to  the  Governor  for  the  pardon  of 
any  persons  convicted  by  an}^  court  of  the  State  of  Indiana, 
*  *  *  and  to  report  to  the  Governor  in  writing  their  con- 
clusions and  recommendations  in  each  case."  Immediately  after 
this  act  became  effective  my  predecessor  appointed  the  members  of 
this  board,  two  of  whom  are  still  members  of  the  board.  One  of 
these  two  members  is  now  holding  under  reappointment  made  by 
the  present  Executive.  The  object  of  the  law  evidently  was  to 
lighten  the  executive  burden  in  matters  relating  to  clemency.  If 
so,  its  object  has  not  been  attained.  It  is  absolutely  impracticable 
to  refer  all  petitions  coming  before  the  Executive  to  the  board  for 
consideration,  and  if  this  were  done  it  would  be  equally  imprac- 
ticable for  the  Executive  to  await  the  board's  recommendations. 
The  salary  of  $300.00  per  annum  precludes  the  members  of  the 
board  giving  their  whole  time  to  the  duties  of  this  position.  It 
cannot  be  expected  and  evidently  was  not  intended  that  they  should. 


53 

Under  the  Constitution  the  board  has  no  power  to  do  more  than 
recommend.  The  Executive  cannot  conscientiously  follow  blindly 
the  recommendation  of  the  board.  Its  findings  are  only  advisory. 
The  responsibility  of  the  exercise  of  the  clemency  power  rests,  in 
the  last  analysis,  upon  the  Executive  alone.  The  deed  when  done 
is  his  act,  and  his  only.  This  fact  compels  him  to  examine  each 
case  for  himself  and  this  leads  to  the  performance  of  the  same  labor 
that  would  have  devolved  upon  him  if  the  case  had  never  been  con- 
sidered by  the  board  at  all.  In  fully  50  per  cent,  of  the  cases  in 
which  clemency  is  recommended,  the  present  Executive  has  been 
compelled  by  what  seemed  to  him  to  be  his  imperative  duty,  to  over- 
rule the  board's  recommendation.  The  board  is  not  and  has  never 
been  an  expensive  board.  On  the  contrary,  the  closest  economy  has 
characterized  its  administration  from  the  beginning.  The  total 
cost  of  the  board  last  year  was  $2,057.00.  Of  this  sum  $862.00 
was  paid  for  clerk  hire,  $97*5  was  paid  in  salaries  to  members,  and 
the  expense  incurred  aggregated  but  $220.00.  The  clerk  of  the 
board  is  an  efficient  stenographer  and  when  not  employed  in  the 
active  service  of  the  board,  she  has  assisted  the  clerks  in  the  Execu- 
tive office,  taking  charge  of  the  clemency  cases  and  the  correspond- 
ence relating  thereto.  While  the  expense  of  the  board  is  not  great, 
it  is  needless.  Its  work  is  so  nearly  nominal  and  of  so  little  assist- 
ance to  the  Executive,  or  of  value  to  the  State,  that  it  may  be  dis- 
pensed with  without  injury  to  the  public  interests.  During  the  en- 
tire year  of  1906  but  26  cases  were  considered  by  the  board.  These 
cases  were  disposed  of  as  follows :  Recommendations  of  clemency, 
9 ;  clemency  rejected,  7  ;  cases  in  which  the  boards  of  parole  acted 
while  they  were  pending  before  the  Board  of  Pardons,  5 ;  cases 
still  pending,  5.  Actual  decision  was  rendered  in  but  16  cases. 
Of  the  9  cases  in  which  clemency  was  recommended,  4  were  ap- 
proved by  the  Executive,  2  are  still  under  advisement,  and  3  were 
overruled. 

I  do  not  mean  to  reflect  in  any  way  upon  the  character,  ability 
or  work  of  the  gentlemen  constituting  this  board.  They  have  my 
confidence  and  my  respect.  They  are  my  personal  friends.  Our 
relations  have  been  and  are  of  the  most  friendly  character,  but  I 
am  thoroughly  convinced  that  the  law  creating  the  board  ought  to 
be  repealed  in  its  entirety.  The  facts  to  which  I  have  called  your 
attention  seem  to  me  to  abundantly  justify  its  repeal.  If  you  will 
provide  the  Executive  with  a  pardon  clerk  at  $900.00  per  year,  the 
same  salary  that  is  now  being  paid  the  clerk  of  the  board,  the 
work  can  be  done  by  the  Executive  without  other  expense,  at  a 


54 

saving  of  more  than  $1,100.00  a  year,  and  with  as  much  certainty 
of  just  decision,  and  less  embarrassment,  than  under  the  provisions 
of  the  present  law.  While  the  board  has  examined  and  decided 
but  16  cases  within  the  last  year,  the  Executive  in  two  years  has 
examined  and  made  personal  investigation  of  and  has  decided  258 
petitions,  an  average  of  1  every  3  days  since  the  beginning  of  his 
term.  Two  hundred  and  twenty  of  the  cases  receiving  executive 
investigation  have  been  rejected.  Clemency  has  been -extended  in 
38.  Every  application  for  clemency  presents  a  difficult  and  deli- 
cate problem.  Where  and  when  to  extend  it,  and  when  and  where 
to  withhold  it,  are  questions  which  can  rarely  be  satisfactorily 
answered,  even  when  the  greatest  care  is  exercised.  Fear  that  the 
power  might  be  abused  through  sympathy,  pity  or  favoritism,  or 
through  yielding  to  the  entreaties  of  influential  and  powerful 
friends  in  some  instances,  or  in  response  to  what  has  seemed  to  be 
popular  demand  in  others,  has  led  me  to  exercise  the  power  with 
the  utmost  care  and  caution. 

In  one  respect  I  have  departed  from  the  custom  of  the  office. 
I  have  heard  the  case  of  the  unfortunate  inmate  of  jail  or  work- 
house as  patiently  and  willingly  and  examined  into  it  with  the 
same  care  that  I  have  that  of  the  inmate  of  the  State  Reformatory 
or  the  State  Prison.  I  have  acted  favorably  in  18  jail  or  work- 
house cases  within  the  last  two  years,  and  yet  the  total  number  of 
cases  in  which  clemency  has  been  extended  within  that  time  is  much 
less  than  the  number  in  which  clemency  was  extended  during  the 
last  two  years  of  my  predecessor.  For  the  years  1903  and  1904 
favorable  action  was  taken  in  62  cases,  none  of  which  were  jail  or 
workhouse  cases.  In  the  two  years  1905  and  1906,  only  a  total  of 
38  cases  have  been  favorably  acted  upon,  and  of  these  18  were  jail 
or  workhouse  cases,  9  were  State  Prison,  8  were  State  Reformatory, 
and  2  Women's  Prison  cases.  One  of  the  38  cases  involved  only 
the  remission  of  the  forfeiture  of  a  recognizance  bond  in  a  case 
where  the  defendant  had  been  acquitted  upon  trial  and  was  there- 
fore not  in  any  institution.  These  38  cases  of  clemency  consisted 
of  10  paroles,  2  paroles  with  the  remission  of  fines,  6  remissions  of 
fines,  18  pardons  and  1  commutation  of  death  penalty  to  life  im- 
prisonment. In  one  instance  pardon  was  granted  that  a  prisoner 
might  be  tried  for  murder,  the  commission  of  which  he  had  con- 
fessed. Full  details  of  each  of  these  cases  will  be  found  in  an  ad- 
denda attached  to  and  filed  herewith.  In  all  cases  where  the  law 
imposes  a  minimum  and  a  maximum  sentence,  its  decree  should 
stand  until  at  least  the  minimum  sentence  has  been  served,  The 


55 

lightest  punishment  the  law  imposes  for  the  commission  of  a  crime 
is  the  minimum  sentence  it  names,  and  until  that  is  served  execu- 
tive clemency  should  be  withheld,  except  where  some  special  and  un- 
usual reason  obtains.  I  have  adhered  closely  to  the  rule  as  here 
stated,  seeking  to  exercise  the  pardon  power  in  such  manner  as  to 
interfere  in  the  smallest  degree  possible  with  the  certainty  of  pun- 
ishment the  law  provides. 

PUBLIC   PRINTING. 

The  law  relating  to  the  public  printing  of  the  State  should  be 
revised.  The  importance  of  the  subject  is  made  apparent  by  the 
statement  of  the  annual  cost  of  the  public  printing  account.  For 
the  fiscal  year  1905  the  institutional  printing  cost  $27,110.64,  that 
for  the  several  departments  and  the  State  generally  $79,735.62,  an 
aggregate  of  $106,846.26.  For  the  fiscal  year  1906  the  institu- 
tional printing  cost  $27,002.29,  that  for  the  several  departments 
and  the  State  generally  $59,994.80,  an  aggregate  of  $86,997.09. 

The  minimum  and  the  maximum  number  of  reports  from  the 
several  departments  required  to  be  printed  should  be  fixed  by  stat- 
ute and  the  number  actually  printed  left  to  the  discretion  of  the 
Printing  Board  within  the  maximum  and  minimum  number  named. 
The  statute  should  clearly  state  what  reports  are  to  be  published 
annually  and  what  biennially.  All  reports  required  to  be  published 
should  be  filed  with  the  Governor  within  thirty  days  from  the  close 
of  the  period  for  which  such  report  is  made,  unless  for  cause  shown 
'the  Printing  Board  shall  grant  additional  time. 

The  printing  of  the  documentary  journal  should  be  discon- 
tinued, as  it  is  nothing  more  than  a  compilation  of  the  several  re- 
ports published  in  other  forms  in  which  they  are  easily  obtainable. 
It  is  therefore  an  extravagant  and  useless  duplication. 

Under  the  present  law  the  number  of  ballots  required  to  be 
printed  by  the  State  Board  of  Election  Commissioners  is  greatly  in 
excess  of  the  number  used  or  needed.  The  number  printed  may 
be  greatly  reduced  without  endangering  the  public  interests,  and  a 
substantial  saving  thereby  made  to  the  State. 

The  portion  of  the  Auditor's  report  relating  to  the  question  of 
insurance  should  be  eliminated  from  the  report  and  printed  as  a 
separate  report.  The  demand  for  this  phase  of  the  report  is  so 
great  as  to  compel  the  printing  of  a  larger  number  of  the  Auditor's 
report  than  otherwise  would  be  necessary.  The  report  as  now 
printed  contains  much  expensive  matter  for  which  persons  who 
desire  only  the  insurance  report  have  no  practical  use.  The  cost 


56 

of  printing  the  report  could  be  materially  lessened  in  this  way 
without  injury  to  the  report.  If  a  separate  department  of  insur- 
ance is  created,  the  insurance  report,  of  course,  would  necessarily 
be  separate  from  that  of  the  Auditor. 

All  printing  and  supplies  should  be  required  to  be  delivered  to 
the  clerk  of  the  Printing  Board,  inspected  and  receipted  for  by 
him  and  delivered  to  the  various  departments  and  institutions, 
under  the  supervision  and  direction  of  the  board.  No  officer,  head 
of  department  or  institution  nor  any  subordinate  in  any  office  or  of 
any  department  or  institution  should  be  permitted  to  negotiate 
with  the  State  printer  for  either  printing  or  supplies.  All  print- 
ing and  all  supplies  should  be  ordered  by  requisition  through  the 
board.  This  will  work  no  hardship  anywhere  and  will  be  inducive 
to  economy  in  all  departments.  Provision  should  be  made  for  an 
assistant  to  the  clerk  of  the  board.  Close  supervision  of  supplies 
and  of  the  public  printing  will  enable  the  State  to  get  what  it 
buys,  and  is  clearly  in  the  interest  of  economy. 

The  law  should  also  provide  for  an  increase  in  the  number  of 
Supreme  Court  reports  originally  printed  to  1,800  and  the  number 
of  Appellate  reports  to  1,600.  This  number  printed  in  the  first 
instance  will  obviate  early  reprints  of  the  different  volumes  of  these 
reports  and  will  be  cheaper  in  the  end.  The  number  of  reprints  of 
any  volume  should  be  left  to  the  decision  of  the  board,  not  to  ex- 
ceed 250. 

The  classifying  of  the  public  printing  for  the  purpose  of  ac- 
cepting bids  and  letting  the  contract  therefor,  should  be  changed. 
It  is  a  matter  of  more  than  passing  importance  that  this  be  done. 
Under  the  present  classification  it  is  quite  impossible  to  obtain  the 
competition  in  letting  the  contract  to  which  the  State  is  entitled. 
The  person  bidding  for  general  supplies  and  stationery  must  bid 
for  and  be  equipped  to  do  the  important  and  difficult  legislative 
printing.  As  a  result  there  is  little  or  no  competition  in  bidding 
for  general  supplies  and  stationery  because  of  the  inability  of 
many  persons  to  do  the  printing  with  which  such  supplies  and  sta- 
tionery are  included.  The  statute  should  provide  at  least  six  classes, 
each  of  which  may  be  bid  for  and  awarded  separately.  The  fol- 
lowing classification  is  suggested  as  an  advantageous  one  for  the 
State: 

The  first  class  should  comprise  the  printing  and  binding  of  the 
laws,  journals,  reports  of  officers  and  public  institutions,  and  all 
book  and  pamphlet  work  to  be  printed  on  book  or  pamphlet  paper, 
except  the  reports  of  the  Appellate  and  Supreme  Courts ; 


57 

The  second  class  should  comprise  the  folding,  stitching,  cover- 
ing and  binding,  and  all  work  belonging  to  the  binding  business 
not  included  in  the  first  class ; 

The  third  class  should  comprise  all  legislative  bills ; 

The  fourth  class  should  comprise  all  commissions,  letter-heads, 
circulars,  blanks  and  other  work  usually  executed  on  writing  pa- 
per; 

The  fifth  class  should  include  all  office  supplies  and  articles  of 
stationery ; 

And  the  sixth  class  should  include  the  printing  and  binding  of 
the  Appellate  and  Supreme  Court  reports. 

This  classification  will  result  in  the  saving  annually  of  large 
sums.  The  revision  of  the  law  along  the  line  suggested  is  there- 
fore most  earnestly  urged  upon  your  consideration. 

STATE    LIBRARY. 

An  act  approved  March  11,  1895,  constituting  the  State  Board 
of  Education,  a  State  Library  Board,  and  vesting  in  such  library 
board  the  management  and  control  of  the  State  Library,  and  an 
act  approved  February  24,  1899,  creating  a  Public  Library  Com- 
mission, to  be  composed  of  tliree  members  appointed  by  the  Gov- 
ernor, to  have  the  control  and  management  of  the  traveling  libra- 
ries provided  for  therein,  should  both  be  repealed,  and  a  new  statute 
enacted  creating  a  State  Library  Commission,  to  be  composed  of 
the  Superintendent  of  Public  Instruction,  ex  officio,  and  four  mem- 
bers to  be  appointed  by  the  Governor,  vesting  in  such  commission 
the  management  and  control  of  the  State  Library  and  such  other 
duties  as  are  now  devolved  upon  the  State  Library  Board,  together 
with  all  the  duties  now  devolved  upon  the  Public  Library  Commis- 
sion. Such  an  act  will  unite  the  library  interests  of  the  State, 
place  them  under  the  control  and  management  of  a  single  board, 
and  make  greatly  for  efficiency  of  service  in  both  departments. 

The  State  Board  of  Education  is  composed  of  able  and  efficient 
men,  but  their  time  is  greatly  taken  by  duties  devolved  upon  the 
State  Board  of  Education.  They  are  men  of  busy  lives,  and  it  is 
not  possible  for  them  to  give  to  the  library  interests  of  the  State 
such  service  as  these  interests  require. 

Under  the  acts  named  the  library  interests  are  controlled  by 
dual  and  independent  authority.  The  unity  of  purpose  essential  to 
effective  administration  and  progressive  work  is  impossible.  By 
this  recommendation  I  mean  no  reflection  upon  the  personnel  of 
either  of  these  boards.  My  criticism  is  of  the  separate,  independent 


58 

and  conflicting  departments  created  by  the  two  acts  in  question  and 
not  of  the  persons  who  are  administering  them. 

The  members  of  the  new  board  should  serve  without  pay,  other 
than  their  actual  traveling  expenses.  No  attempt  should  be  made 
to  amend  either  of  the  present  statutes,  but  a  new  and  independent 
act  should  be  passed  devolving  upon  the  board  created  full  control 
of  both  departments. 

CHANGE    IN    FISCAL   YEAR. 

The  present  law  provides  that  the  fiscal  year  shall  begin  on  the 
1st  day  of  November  and  end  on  the  31st  day  of  October  of  each 
year,  and  that  all  official  salaries  shall  be  paid  quarterly,  beginning 
with  the  81st  day  of  January. 

For  some  reason  the  provision  of  the  law  as  to  the  time  of  pay- 
ment of  official  salaries  has  been  disregarded  for  many  years.  On 
the  31st  day  of  January  last,  it  was  thought  best  to  return  to  the 
time  of  payment  fixed  by  the  law.  This  occasioned  the  payment  of 
salaries  for  thirteen  months  in  the  last  fiscal  year,  while  the  appro- 
priations therefor  were  for  but  twelve  months.  The  return  to  the 
time  of  payment  required  by  the  law  necessitated  the  payments 
made.  Payments  for  the  additional  month  should  be  legalized. 

I  recommend,  also,  a  change  in  the  beginning  and  the  end  of 
the  fiscal  year.  The  year  should  begin  on  the  1st  day  of  October 
and  end  with  the  30th  day  of  September  of  each  year.  All  an- 
nual and  biennial  reports  required  of  the  several  departments  and 
officers  of  the  State  relate  to  fiscal  years.  The  law  provides  that 
these  reports  be  printed  and  filed  with  the  members  of  the  General 
Assembly  for  their  information.  These  reports  cannot  be  made  up 
until  the  close  of  the  fiscal  year  they  cover.  This  gives  but  sixty 
days  in  which  to  prepare  the  reports  and  to  secure  their  publication. 
As  a  result  many  of  the  reports  are  not  filed  with  the  Governor  un- 
til the  eve  of  the  assembling  of  the  General  Assembly  and  are  not 
printed  until  after  the  adjournment  thereof.  By  closing  the  fiscal 
year  on  the  30th  of  September,  an  additional  month  will  be  given 
and  it  will  become  possible  to  secure  the  publication  of  the  reports 
in  time  for  distribution  at  the  beginning  of  the  session.  This 
change  will  also  cause  the  fiscal  quarter  to  correspond  to  and  end 
with  the  calendar  quarter.  If  the  change  is  made,  a  clause  should 
be  inserted  in  the  law  providing  for  the  use  of  but  eleven- twelfths 
of  the  general  appropriation  made  for  the  fiscal  year  of  1907. 


59 


CLAIM  OF  ONE  HUNDRED  SIXTY-FIRST  REGIMENT. 

The  officers  and  men  of  the  161st  Regiment  of  Indiana  Volun- 
teer Infantry  and  Companies  A  and  B,  Colored  Infantry,  held  at 
the  time  they  were  mustered  out  of  service  what  was  believed  to  be  a 
valid  claim  against  the  United  States  Government  for  back  pay  due 
them  on  account  of  services  rendered  the  government  during  the 
Spanish-American  War.  These  claims,  while  large  in  the  aggre- 
gate, were  small  in  individual  amount,  so  small  in  fact  that  no  mem- 
ber of  the  organizations  could  afford  to  incur  the  expense  of  prose- 
cuting his  claim.  This  led  my  predecessor  to  make  a  contract  as 
Governor,  on  behalf  of  the  officers  and  men  of  said  organizations, 
with  Honorable  A.  W.  Wishard  and  others,  for  the  prosecution  of 
all  such  claims.  The  compensation  was  fixed  at  a  sum  equal  to  25 
per  cent,  of  any  recovery  which  might  be  made,  and  provided  that 
the  claim  should  be  prosecuted  at  the  expense  of  counsel  and  that 
no  compensation  should  be  paid  in  the  event  of  the  failure  of  re- 
covery. 

Claims  were  made  aggregating  $82,883.95  and  prosecuted  with 
such  vigor  and  success  that  $46,698.47  was  finally  allowed  upon 
appeal,  by  the  Comptroller  of  the  Treasury.  The  claims  were 
prosecuted  in  the  name  of  the  Governor  of  the  State  for  the  use 
and  benefit  of  the  officers  and  men  named.  The  allowance  was 
made  in  the  name  of  the  present  Executive.  The  compensation  of 
counsel  provided  by  the  contract,  $11,674.61,  was  paid  them,  and 
the  balance  amounting  to  $35,023.86  was  placed  in  the  bank  in  the 
name  of  the  Governor,  for  distribution  to  the  members  of  said  or- 
ganizations. This  distribution  is  being  made  through  the  office  of 
the  Adjutant-General  of  the  State,  as  rapidly  as  the  claimants  can 
be  located  and  proof  of  their  claims  obtained.  On  the  31st  day  of 
December,  1906,  the  disbursements  aggregated  $23,669.32.  Hav- 
ing rendered  the  service,  the  members  of  these  organizations  ought 
to  be  paid  in  full.  I  believe  it  to  be  the  duty  of  the  State  to  reim- 
burse them  for  the  expense  incurred  in  the  prosecution  of  their 
claims,  and  I  therefore  recommend  that  the  sum  of  $11,674.61  be 
appropriated  for  that  purpose,  to  be  drawn  by  the  Governor  upon 
his  voucher  and  distributed  through  the  office  of  the  Adjutant-Gen- 
eral, in  the  same  manner  and  upon  the  same  basis  that  the  present 
fund  is  being  disbursed. 

A  number  of  claimants  have  died  since  their  discharge  from  the 
service,  and  payment  can  be  made  now  only  to  their  administrators. 
In  many  instances  the  expense  of  letters  of  administration  would 


60 

exceed  the  amount  of  the  claim.  For  this  reason  I  recommend  the 
passage  of  a  special  act  authorizing  the  Governor  to  pay  the  sums 
thus  involved  to  the  next  of  kin  of  all  deceased  claimants  upon 
proof  of  kinship,  without  additional  formality  or  expense. 

BAKER    BRIBERY    CASE. 

The  last  General  Assembly  appropriated  $5,000  for  executive 
use  for  the  apprehension,  return  and  prosecution  of  one  Oscar  A. 
Baker,  charged  with  the  bribery  of  a  member  of  that  body.  At 
the  time  the  appropriation  was  made  Mr.  Baker  was  a  fugutive 
from  justice,  having  fled  the  State  and  gone  to  the  Dominion  of 
Canada,  according  to  the  best  information  the  Executive  could  ob- 
tain. Upon  inquiry  of  the  State  Department  of  the  Federal  Gov- 
ernment I  was  advised  that  the  crime  of  bribery  was  not  extradita- 
ble under  the  existing  treaty  between  the  United  States  and  Great 
Britain,  and  that  Mr.  Baker  could  not  be  compelled  to  depart  from 
Canada  even  though  apprehended.  Believing  that  his  return  and 
apprehension  under  such  circumstances  would  be  more  probable  if 
no  public  reward  was  offered  for  his  arrest,  I  contracted  with  dif- 
ferent sheriffs  and  officials  and  detectives  for  his  apprehension  and 
return,  agreeing  to  pay  therefor  $2,000,  reserving  the  right  to  ter- 
minate such  employment  at  any  time  when  in  the  judgment  of  the 
Executive,  public  reward  should  be  offered.  None  of  these  persons 
was  able  to  apprehend  Mr.  Baker.  Later  I  cancelled  all  such  agree- 
ments and  offered  a  public  reward  of  $3,000  for  his  capture  and 
return  to  the  custody  of  the  sheriff  of  Marion  County.  Nothing, 
however,  has  come  of  the  offer,  further  than  the  receipt  of  informa- 
tion through  the  late  sheriff  of  Marion  County  that  Mr.  Baker  is 
still  in  the  Dominion  of  Canada  and  refuses  to  return  to  Indiana. 

The  offense  with  which  he  is  charged  is  a  grave  one.  It  in- 
volves the  integrity  of  the  Sixty-fourth  General  Assembly.  I 
therefore  ask  that  the  appropriation  heretofore  made  be  renewed. 

STATE   INSTITUTIONS. 

The  State  institutions,  taken  as  a  whole,  never  were  in  better 
condition  than  they  have  been  during  the  past  biennial  period. 
Political  considerations  never  affected  them  as  little.  Their  man- 
agement has  been  characterized  by  economy  and  efficiency.  In  a 
number  of  instances  the  cost  of  maintenance  per  capita  has  been 
reduced,  notwithstanding  the  increase  in  the  cost  of  supplies. 

There  is,  however,  still  room  for  improvement  in  the  administra- 
tion of  these  institutions.  I  suggest  for  your  consideration  the 
propriety  of  revising  the  laws  relating  to  all  such  institutions  other 


61 

than  the  institutions  for  higher  education,  that  uniformity  may  be 
had  in  their  administration.  At  the  present  time  the  number  of 
members  of  the  several  boards  differs.  Some  of  them  are  not  re- 
quired by  law  to  be  nonpartisan  and  are  so  now  from  executive 
choice  alone.  The  salaries  of  members  of  these  boards  vary  from 
$300  to  $500  per  year  and  necessary  traveling  expenses.  In  some 
institutions  the  boards  choose  not  only  the  superintendent  but  the 
subordinates  as  well.  Qualifications  are  specified  for  membership 
on  some  of  the  boards  which  greatly  hamper  the  Executive  in  the 
selection  of  such  members.  Reports  are  to  be  made  at  different 
times  and  in  different  forms.  Better  service  can  be  had  if  these 
boards  are  composed  of  four  members,  not  more  than  two  of  whom 
shall  be  of  the  same  political  party.  There  should  be  at  least  one 
woman  on  the  board  of  every  institution  in  which  women  are  in- 
mates. All  salaries  should  be  fixed  at  $300.00  per  annum  and 
necessary  traveling  expenses  not  to  exceed  $125.00  per  year.  The 
duty  of  selecting  superintendents  should  be  devolved  upon  the 
boards,  but  their  authority  in  this  direction  should  end  there.  Each 
superintendent  should  have  the  right  to  select  his  own  subordinates 
and  be  held  responsible  to  the  board  for  their  conduct. 

STATE  REFORMATORY. 

Acting  under  authority  of  a  statute  enacted  by  the  Sixty- 
fourth  General  Assembly,  trade  schools  and  a  school  of  letters  have 
been  established  and  put  in  operation  in  the  State  Reformatory,  the 
particulars  of  which  are  set  forth  with  clearness  and  accuracy  in  the 
fifth  biennial  report  of  the  institution.  Their  development  has  been 
such  as  to  bring  results  beyond  the  hope  even  of  those  most  favor- 
able to  the  legislation  which  authorized  them. 

On  the  1st  of  July,  last  year,  all  labor  contracts  ceased  and  the 
industries  retained  became  an  integral  part  of  the  trade  school  sys- 
tem of  the  institution. 

I  cannot  commend  too  highly  the  work  being  done  and  the 
progress  being  made.  The  report  referred  to  will  be  laid  upon 
your  desks.  It  will  bear  inspection  and  analysis.  I  trust  it  will 
receive  the  consideration  to  which  the  great  importance  of  the  sub- 
ject it  covers  is  entitled. 

STATE    PRISON. 

The  labor  contracts  at  the  State  Prison  will  expire  in  1910.  If 
they  are  to  be  discontinued  it  is  of  the  utmost  importance  that  pro- 
vision be  made  prior  to  that  time  for  the  employment  of  the  in- 
mates. I  believe  this  can  best  be  done  by  finding  employment  for 


62 

them  on  State  account.  With  this  purpose  in  view,  the  Board  of 
Control  of  the  Prison,  with  executive  approval,  purchased  and  in- 
stalled a  plant  for  the  manufacture  of  binder  twine,  at  a  cost  of 
$32,174.40.  The  plant  was  not  ready  for  operation  until  March, 
1906.  From  that  time  to  the  31st  day  of  October,  1906,  an  aver- 
age of  64  men  were  employed  in  the  manufacture  of  twine.  A! 
though  the  season  was  far  advanced  when  the  operation  was  begun, 
a  ready  sale  was  found  for  the  manufactured  product.  A  careful 
analysis  of  the  accounts  of  the  plant  indicates  that  the  enterprise 
can  be  successfully  developed  with  substantial  profit  to  the  State. 
An  excellent  quality  of  twine  is  being  manufactured.  It  can  be 
placed  upon  the  market  at  a  less  price  than  the  trust  product.  I 
am  convinced  if  the  plant  is  properly  developed  and  carefully  man- 
aged that  it  will  result  in  the  regular  employment  of  perhaps  100 
of  the  inmates,  in  a  profit  to  the  State,  and  in  a  saving  to  the 
farmers  of  the  State  in  the  cost  of  twine  used  by  them.  The  State 
account  fund  provided  by  the  present  statute  is  insufficient.  A 
new  statute  should  be  enacted  having  particular  reference  to  the 
management  and  control  of  this  industry,  and  making  provision 
for  a  larger  revolving  fund  for  its  use.  The  subject  is  covered  by 
a  measure  prepared  by  the  late  Attorney-General,  which  will  be  in- 
troduced, and  which  I  hope  will  have  your  early  consideration. 

I  am  advised  by  the  warden  of  the  Prison  that  a  fund  made  up 
of  many  small  items  of  earnings  by  certain  inmates  under  the  rules 
of  the  Prison,  who  have  died,  been  executed  or  have  violated  their 
paroles,  has  accumulated  under  his  administration.  This  fund  now 
aggregates  $522.22.  Some  provision  should  be  made  concerning 
it.  It  has  been  suggested  to  the  warden  that  legislation  should  be 
had  providing  for  its  transfer  to  the  library  fund  of  the  institu- 
tion. 

HOUSE    OF    CORRECTION    FOR    WOMEN. 

Within  the  next  few  months  the  Industrial  School  for  Girls  will 
be  separated  from  the  Women's  Prison.  The  lack  of  proper  sep- 
aration in  our  jails,  the  scandals  that  have  developed  in  some  of 
them  on  account  of  the  confinement  of  women  therein  and  the  fre- 
quent unsatisfactory  treatment  there  accorded  to  women,  together 
with  the  lack  of  employment  for  them,  lead  me  to  recommend  what 
seems  to  me  a  satisfactory  solution  of  the  problem  of  their  care  and 
confinement.  That  is,  the  ulitization  of  the  vacated  parts  of  the 
girls'  side  of  the  Women's  Prison  as  a  workhouse  for  women.  Long 
term  prisoners  can  be  sentenced  to  the  Women's  Prison  as  they  now 


G3 

are.  Those  sentenced  for  a  short  term  may  be  sentenced  to  the 
Workhouse  for  Women.  If  the  change  is  made  no  convicted  wo- 
man should  thereafter  be  confined  in  any  jail  or  workhouse  in  the 
State.  The  expense  of  the  change  will  not  be  great.  The  two  in- 
stitutions can  be  operated  by  the  same  board,  with  the  same  organi- 
zation, and  at  a  less  cost  per  capita  than  women  are  now  maintained 
in  the  county  jails. 

INDIANA   INDUSTRIAL   SCHOOL   FOR    GIRLS. 

The  commission  having  in  charge  the  location  and  erection  of 
the  Indiana  Industrial  School  for  Girls  has  made  substantial  prog- 
ress in  the  work  committed  to  its  care.  Contracts  for  the  construc- 
tion of  seven  cottages,  a  schoolhouse  and  a  service  plant  have  been 
executed,  and  the  buildings  are  now  nearing  completion.  The 
buildings  are  modern  and  substantial.  The  total  appropriation  by 
the  Sixty-fourth  General  Assembly  was  $235,000.  The  total  cost 
of  constructing  the  buildings  named,  including  the  expenses  of  the 
commission  incident  thereto,  will  practically  equal  the  appropria- 
tion. This  will  leave  the  commission  without  funds  to  furnish  and 
equip  the  institution.  This  should  be  provided  for  by  an  emergency 
appropriation,  to  be  made  immediately  available. 

The  population  of  the  institution  has  increased  to  such  an  ex- 
tent as  to  require  the  construction  of  at  least  one  new  cottage  and 
two  if  the  finances  of  the  State  will  justify.  Provision  should  also 
be  made  for  two  cottages  for  male  employes  and  for  an  adminis- 
tration building.  Also  for  a  cow  barn,  horse  barn,  storehouse  and 
cold  storage  building.  Appropriations  for  these  buildings  need 
not  be  included  in  the  emergency  appropriation  for  furnishings  and 
equipment,  but  should  be  made  available  early  in  the  present  year. 
The  cost  of  furnishing  nine  cottages  and  equipping  the  school- 
house  it  is  estimated  will  aggregate  $25,000.  A  total  of  not  less 
than  $120,000  is  necessary  to  the  completion  of  the  institution,  and 
I  therefore  recommend  the  appropriation  of  that  sum. 

I  believe  it  important  that  the  furnishing  and  equipment  of  the 
institution  and  the  construction  of  the  new  buildings  that  may  be 
authorized,  be  referred  to  the  board  of  trustees  to  be  appointed  by 
the  terms  of  the  present  statute  upon  the  completion  of  the  institu- 
tion. The  separation  of  the  School  from  the  Women's  Prison  and 
the  transfer  of  the  inmates  to  the  new  institution  involves  much 
detail  and  will  require  much  time  and  should  be  made  under  the 
immediate  supervision  of  the  board  of  trustees.  I  therefore  urge 
the  passage  of  a  special  act  authorizing  the  immediate  appointment 


64 

of  a  board  of  trustees  and  referring  to  them  the  furnishing  and 
equipment  of  the  institution  and  the  removal  of  the  inmates  to  the 
new  location. 

The  name  of  the  institution  should  be  changed  to  the  "Indiana 
Girls'  School." 

INSTITUTION   FOR   THE   INSTRUCTION   OF   THE   DEAF. 

The  commission  having  in  charge  the  construction  of  the  new 
institution  for  the  instruction  of  the  deaf  has  selected  and  pur- 
chased a  site  consisting  of  76-93  acres  lying  immediately  north  of 
the  State  Fair  Grounds,  fronting  42nd  street,  and  lying  east  of  the 
right  of  way  of  the  Chicago,  Indianapolis  &  Louisville  Railway, 
4%  miles  distant  from  the  center  of  the  city  of  Indianapolis.  The 
purchase  price  of  the  land  was  $32,000.  Under  the  limitation  of 
the  law  all  the  commission  could  pay  was  $30,771.  The  difference 
was  contributed  by  private  persons.  The  site  selected  and  the  price 
paid  are  both  such  as  to  commend  the  action  of  the  commission  to 
your  approval. 

On  the  31st  day  of  October,  the  commission  had  received : 

From  sales  of  land  made  under  the  late  administration $158,280  56 

From  sales  of  products  60  00 

From  rent  200  00 

From  interest  on  bonds  .  572  18 


A  total  of $159,112  74 

Amount  then  unpaid  on  purchase  price  of  land,  principal  and  in- 
terest      43,884  00 

Interest  accrued  on  deposits  in  bank 1,200  70 


Total  from  sales  of  lands  account,  sale  of  products,  rent 

and  interest $204,197  44 

The  total  appropriation  made  by  the  Sixty-fourth  General  As- 
sembly was  $315,000,  which  includes  the  $204,197.44  named  above. 
Of  this  sum  the  commission  had  expended  on  account  of  purchase  of 
real  estate  and  expenses  incident  thereto  and  to  the  selection  of  a 
site,  the  sum  of  $40,771.77,  leaving  a  balance  unexpended  of 
$274,228.23. 

Plans  have  been  prepared  providing  for  the  construction  and 
equipment  of  a  modern  institution  having  a  population  of  500, 
upon  a  modified  cottage  plan.  When  completed  in  accordance  with 
the  plans  the  institution  will  consist  of  22  buildings,  as  follows :  A 
schoolhouse,  dining  hall  and  kitchen  bakery,  power  house,  boys' 


65 

dormitory  (4  buildings),  girls'  dormitory  (4  buildings),  hospital, 
boys'  industrial  building,  girls'  industrial  building,  administration 
building,  residence,  laundry,  propagating  house,  cow  barn,  horse 
barn,  contagion  hospital  and  storehouse. 

The  appropriation  made  is  wholly  inadequate.  In  fact,  no  more 
than  sufficient  to  make  a  substantial  beginning.  The  matter  has 
been  so  long  delayed  that  after  full  consideration  it  was  believed 
best  to  proceed  with  the  construction  of  such  buildings  as  will  come 
within  the  appropriation  in  cost  of  construction.  Accordingly  a 
contract  was  entered  into  for  the  construction  of  the  schoolhouse, 
dining  hall  and  kitchen  bakery,  and  a  power  house,  for  the  sum  of 
$268,477.  In  addition  to  this  a  provisional  contract  was  entered 
into  for  the  construction  of  all  the  other  buildings  named,  at  a  cost 
of  $647,737.50,  making  the  total  cost  of  the  institution  for  build- 
ings when  completed,  $916,214.50.  The  expenditure  is  large,  but 
the  institution  for  the  instruction  of  the  deaf  is  not  a  charitable  in- 
stitution. It  is  an  educational  institution  and  should  be  built  upon 
a  plan  in  keeping  with  its  purpose.  It  is  estimated  that  it  will  re- 
quire $128,500  for  the  improvement  of  the  grounds,  and  for  fur- 
nishing and  equipping  the  institution,  in  addition  to  the  cost  of  the 
buildings.  This  covers  the  cost  of  the  institution  completed.  The 
revenues  of  the  State  will  not  permit  an  appropriation  during  the 
next  biennial  period  of  a  sum  sufficient  to  complete  the  institution 
as  planned.  The  provisional  contract,  however,  provides  for  the 
construction  of  each  separate  building  for  an  agreed  price,  clearly 
specified  in  the  contract,  and  is  made  subject  to  the  approval  and 
ratification  of  the  General  Assembly.  It  is  also  provided  that  if  the 
General  Assembly  shall  ratify  the  contract  for  any  one  of  the  build- 
ings covered  by  the  provisional  contract  and  make  an  appropriation 
for  its  construction,  that  the  contract  to  that  extent  shall  become 
a  valid  and  binding  contract.  This  leaves  the  General  Assembly  in 
a  position  to  judge  for  itself  the  extent  to  which  it  shall  appro- 
priate funds  and  ratify  the  provisional  contract. 

If  economy  is  used  and  appropriations  are  made  with  care  and 
discrimination,  I  believe  the  state  of  the  finances  will  warrant  an 
appropriation  of  $400,000  for  the  next  biennial  period.  The  act 
of  appropriation,  however,  should  clearly  specify  the  purpose  of 
the  appropriation,  and  the  extent  to  which  ratification  of  the  con- 
tract is  intended  to  be  made. 


[5—19891] 


66 


SOUTHEASTERN    HOSPITAL   FOR   THE    INSANE. 

An  act  approved  February  21,  1905,  authorized  the  construc- 
tion of  a  new  hospital  for  the  insane  to  be  known  as  the  South- 
eastern Hospital  for  the  Insane,  and  for  the  appointment  of  a  com- 
mission having  authority  to  select  a  site  and  construct  the  necessary 
buildings.  A  commission  was  duly  appointed  and  a  site  selected 
near  the  city  of  Madison,  overlooking  the  Ohio  River.  The  build- 
ing site  and  farm  consists  of  353.848  acres,  for  which  the  sum  of 
$36,829.84  was  paid.  In  addition  to  the  building  site  and  farm, 
9-943  acres  for  right  of  way  and  water  supply  were  purchased  at  a 
cost  of  $2,385,  making  a  total  acreage  of  363.791  acres,  and  a  total 
cost  of  $39,214.84.  Dr.  S.  E.  Smith,  Superintendent  of  the  East- 
ern Indiana  Hospital  for  the  Insane,  was  selected  by  the  commis- 
sion as  expert  medical  adviser,  and  his  services  have  added  greatly 
to  the  efficiency  of  the  commission.  Plans  have  been  obtained  for 
a  completed  institution  on  the  cottage  plan,  modern  in  character, 
for  a  population  of  1,000,  consisting  of  22  cottages,  one-half  to 
constitute  the  department  for  men  and  the  other  half  the  depart- 
ment for  women,  ranging  in  capacity  from  30  to  60  beds  each,  for 
the  proper  care  of  nine  several  and  distinct  classes  of  insane  per- 
sons ;  an  administration  building  for  offices  and  officers'  quarters ; 
a  service  building  for  the  kitchen ;  2  congregate  dining-rooms,  an 
assembly  hall,  employes'  quarters  and  dining-room,  a  power  house, 
a  storeroom,  a  laundry,  an  industrial  building  for  a  sewing-room, 
a  shoeshop  and  rooms  wherein  patients  may  be  safely  employed,  a 
workshop  for  painters  and  carpenters,  a  pumping  station,  a  water 
tower  and  a  stable. 

The  total  appropriation  carried  by  the  bill  authorizing  the  con- 
struction of  the  institution  was  $560,000.  The  following  disburse- 
ments had  been  made  at  the  close  of  the  last  fiscal  year : 

For  land    $39,214  84 

Wells  2,273  75 

Equipment  for  wells 1,296  13 

Architect's  fees   5,000  00 

Commissioners'  expenses  2,962  40 

Maintenance  of  farm  and  grounds 1,340  36 

Incidental  expenses 698  42 


Total   $52,785  90 

Balance  available 507,214  10 


67 

The  appropriation  made  was  found  wholly  inadequate  to  com- 
plete the  institution.  The  necessities  of  the  State  on  account  of 
the  great  number  of  insane  persons  whose  care  is  unprovided  for 
were  thought  to  be  such  as  to  justify  the  construction  of  an  institu- 
tion that  shall  have  capacity  for  at  least  1,000  beds.  That  there 
should  be  no  further  delay  a  contract  was  entered  into  for  the  con- 
struction of  such  number  of  the  buildings  as  could  be  built  within 
the  appropriation.  These  buildings  are  as  follows:  Standpipe, 
foundation  and  casing;  all  tunnels,  pumping  station,  administra- 
tion building,  rear  center  building,  power  house,  laundry,  store- 
house, mechanical  equipment,  including  the  power  equipment,  steam 
heating  and  ventilation,  water  supply  and  iron  sewer,  the  electrical 
equipment  and  wiring,  plumbing  and  tile  sewer,  excepting  so  much 
of  the  heating  apparatus,  electrical  wiring  and  plumbing  as  be- 
long to  the  buildings  not  enumerated  in  the  contract.  The  con- 
tract price  is  $493,468.00.  A  provisional  contract  was  entered 
into  subject  to  approval  and  ratification  by  the  General  Assembly, 
for  the  construction  and  equipment  of  all  the  structures  not  in- 
cluded in  the  positive  contract,  for  the  sum  of  $673,005.00.  In 
addition  to  these  contracts  the  hardware  has  been  contracted  for,  at 
a  cost  of  $8,855.19,  and  a  custodis  chimney  for  $5,325.00.  An 
expense  has  also  been  incurred  on  account  of  changes  amounting  to 
$419.30,  making  a  total  cost  of  the  institution  constructed  ready 
for  furnishing,  $1,181,072.49.  It  is  estimated  that  the  household 
equipment  and  other  expense  incident  to  the  preparation  of  the  in- 
stitution for  occupancy  will  amount  to  $202,500,  making  the  total 
cost  of  the  institution  completed  and  ready  for  use,  $1,436,358.39. 
This  leaves  a  balance  of  construction  and  equipment  cost  unpro- 
vided for  of  $876,358.  An  appropriation  of  this  sum  is,  in  jny 
judgment,  greater  than  the  revenues  of  the  State  will  justify  for 
the  next  biennial  period.  The  provisional  contract,  however,  is  so 
drawn  that  the  cost  of  each  separate  building  is  clearly  set  forth. 
It  is  also  provided  that  the  General  Assembly'  may  ratify  such 
provisional  contract  in  whole  or  in  part  and  that  such  part  of  the 
contract  as  shall  be  ratified,  shall  be  valid  and  binding.  It  is  there- 
fore important  that  whatever  provision  is  made,  shall  specify 
clearly  what  buildings  are  intended  to  be  appropriated  for  and  to 
what  extent  the  contract  is  ratified. 

I  believe  the  revenues  of  the  State  will  justify  an  appropriation 
for  this  institution  of  $500,000  for  the  next  biennial  period. 


68 


EPILEPTIC  INSTITUTION. 

By  an  act,  approved  March  6,  1905,  an  institution  for  the  care 
and  treatment  of  epileptics  was  authorized  and  provision  made  for 
the  appointment  of  a  commission  to  purchase  a  site  therefor. 
Within  the  time  specified  by  the  statute  the  commission  was  ap- 
pointed and  a  site  selected  by  it,  consisting  of  1,228.82  acres,  near 
the  city  of  Newcastle,  in  Henry  County,  costing  $122,882.00,  or 
an  average  of  $100.00  per  acre.  The  expenses  of  the  commission 
aggregated  $2,697.34,  leaving  an  unexpended  balance  of  $24,- 
420.66.  The  life  of  the  commission  ended  with  the  purchase  of 
the  site. 

On  the  15th  day  of  March,  1906,  a  board  of  trustees  was  ap- 
pointed, and  this  board  has  since  been  in  charge  of  the  institution. 
It  has  selected  a  superintendent,  and  has  erected  buildings  which 
will  accommodate  fifty  patients  from  the  unexpended  balance  of  the 
appropriation.  But  on  account  of  lack  of  sufficient  funds  they 
cannot  be  equipped  or  furnished  until  an  appropriation  is  made 
therefor. 

Further  legislation  should  be  had  relative  to  the  opening  of  the 
institution  and  the  character  of  the  inmates  which  shall  first  be  re- 
ceived. The  whole  matter  is  something  of  an  experiment  and 
should  be  developed  with  care  and  caution.  In  view  of  these  facts 
and  the  heavy  drain  to  be  made  upon  the  public  revenues  during 
the  coming  biennial  period,  I  do  not  recommend  the  appropriation 
of  more  than  $150,000.00  for  the  construction  of  new  buildings  at 
this  institution. 

The  commission  in  purchasing  the  lands  constituting  the  site 
for  the  village  contracted  for  the  same  at  $100.00  an  acre  with  a 
committee  of  citizens  of  Henry  County,  on  the  supposition  that  it 
was  acquiring  title  to  1,228.82  acres,  and  with  the  understanding 
that  after  the  lands  were  conveyed  to  the  State  a  careful  survey 
would  be  made,  and  that  any  excess  would  be  paid  for  at  the  rate 
of  $100.00  per  acre,  and  any  deficiency  in  the  number  of  acres 
should  work  a  reduction  in  the  purchase  price  of  $100.00  per  acre. 
Such  a  survey  has  been  made  by  a  competent  engineer  and  certified 
to  the  executive  office,  showing  the  aggregate  of  the  several  tracts 
purchased  to  be  1,244.55  acres,  or  an  excess  of  15.73  acres.  There 
should  be,  therefore,  an  additional  appropriation  of  $1,573.00,  to 
be  paid,  upon  voucher  of  the  Governor,  to  said  committee  in  full 
settlement  of  the  purchase  price  of  said  lands. 


69 

The  purchase  of  the  sites  for  these  three  new  institutions  was 
made  with  care,  and  the  State  has  more  than  value  received  in  each. 
Titles  to  all  the  lands  included  in  them  were  examined  by  the  Attor- 
ney-General and  approved  by  him  before  payment  was  made. 

TUBERCULOSIS   COMMISSION. 

By  joint  resolution  approved  March  6,  1905,  the  Sixty-fourth 
General  Assembly  authorized  the  appointment  of  a  commission  of 
five  persons,  two  of  whom  were  required  to  be  members  of  the  Sen- 
ate, holding  over,  two  members  of  the  House  of  Representatives, 
and  one  a  practicing  physician  of  prominence  in  the  State,  to  in- 
vestigate the  need  of  a  hospital  for  the  treatment  of  tuberculosis  in 
this  State  and  the  work  of  such  institutions  in  other  States.  Pur- 
suant to  the  authority  conferred  by  this  resolution,  the  Executive 
appointed  Alexander  G.  Gavins  and  Carl  E.  Wood,  Senators ;  Rich- 
ard N.  Elliott  and  Loren  F.  Gage,  members  of  the  House  of  Repre- 
sentatives, and  Theodore  F.  Potter,  a  physician. 

These  gentlemen  have  made  wide  and  intelligent  investigation 
of  the  subject  and  have  filed  a  report  of  their  proceedings  and  their 
conclusions,  copies  of  which  will  be  furnished  you  and  which  I  com- 
mend to  your  consideration.  The  subject  is  one  that  appeals 
greatly  to  all  thoughtful  persons,  and  if  the  finances  of  the  State 
will  permit,  steps  leading  to  the  establishment  of  such  an  institution 
should  be  taken  by  you. 

MORTON    MONUMENT. 

The  Sixty-fourth  General  Assembly  appropriated  $35,000.00 
"for  the  purpose  of  erecting  an  heroic  statue  of  enduring  material 
to  perpetuate  the  name  and  services  of  Oliver  Perry  Morton,"  and 
providing  for  the  appointment  of  five  commissioners  to  erect  such 
statue. 

The  commission  was  duly  appointed,  consisting  of  Messrs. 
Warren  King,  E.  B.  Martindale,  Joseph  I.  Irwiri,  Henry  C. 
Adams  and  Daniel  R.  Lucas.  Shortly  thereafter  Dr.  Lucas  re- 
signed to  become  the  secretary  of  the  commission,  and  Mr.  I.  H.  C. 
Royse  was  appointed  to  the  vacancy  occasioned  by  his  resignation. 

A  site  for  the  statue  was  selected  immediately  in  front  of  the 
east  entrance  to  the  Capitol.  A  design  prepared  by  Mr.  Rudolph 
Schwarz  of  an  heroic  bronze  statue  was  selected  and  a  contract 
entered  into  with  Mr.  Schwarz  for  the  same. 

The  commission  will  be  able  to  erect  a  monument  and  statue 
in  compliance  with  the  law  providing  therefor,  and  which  will  fit- 


70 

tingly  commemorate  the  memory  and  services  of  Governor  Morton, 
within  the  appropriation  named,  and  hopes  to  be  able  to  unveil  the 
same  before  your  adjournment. 

LAWTON    STATUE. 

The  people  of  Indiana,  through  private  subscription,  have  pro- 
vided the  means  for  a  statue  to  the  memory  of  General  Henry  W. 
Lawton. 

A  commission  was  selected  with  authority  to  select  and  erect 
what  in  their  judgment  should  be  a  fitting  memorial.  A  design — 
the  joint  work  of  Daniel  Chester  French  and  Andrew  O'Connor — 
was  accepted  and  a  contract  entered  into  with  them  therefor.  This 
statue  has  been  completed  and  is  now  in  the  possession  of  the  com- 
mission. A  site  has  been  selected  upon  the  Washington-street  side 
of  the  public  square  in  the  city  of  Indianapolis.  The  date  of  the 
unveiling  of  the  statue  has  been  set  for  Memorial  day  of  this  year. 
The  occasion  will  be  worthy  of  State  recognition.  It  will  mark 
the  first  opportunity  for  formal  recognition  on  the  part  of  the 
people  of  Indiana  of  the  services  and  devotion  of  a  great  soldier. 
The  President  of  the  United  States  has  been  invited  to  participate 
in  the  ceremony  of  unveiling  and  is  expected  to  be  present.  Up  to 
the  present  time  the  State  has  contributed  nothing  whatever  toward 
the  consummation  of  this  patriotic  purpose. 

I  recommend  that  you  appropriate  the  sum  of  $500.00,  to  be 
used  by  the  commission  in  defraying  the  expenses  of  the  unveiling 
ceremonies  as  it  may  think  best. 

NANCY    HANKS    LINCOLN    GRAVE. 

Nancy  Hanks  Lincoln,  mother  of  Abraham  Lincoln,  is  buried 
near  Lincoln  City,  in  Spencer  County,  Indiana.  The  site  of  the 
grave  is  marked  by  a  suitable  monument  contributed  by  Mr.  J.  S. 
Culver,  of  Springfield,  Illinois,  and  unveiled  two  or  three  years 
ago  with  appropriate  ceremonies. 

The  title  to  the  land  where  her  grave  is  located  is  vested  in 
the  Nancy  Hanks  Memorial  Association.  The  association  is  in- 
corporated under  the  laws  of  the  State,  but  has  no  income  out  of 
which  to  pay  the  expense  of  caring  for  the  grave  or  maintaining 
the  grounds  it  owns.  It  now  has  on  hands  a  fund  of  $925.37. 
Both  the  grave  and  the  grounds  are  sadly  neglected,  their  condi- 
tion being  such  as  to  cause  much  unfavorable  but  just  criticism. 
The  association  desires  to  convey  the  grounds  to  the  State  of  In- 


71 

diana,  and  is  willing  to  turn  over  to  the  State  the  money  now  in  its 
treasury  if  the  State  will  accept  the  gift  and  assume  the  responsi- 
bility of  caring  for  the  grave. 

I  recommend  the  passage  of  a  law  authorizing  the  acceptance 
of  both  the  land  and  the  money,  the  appointment  of  a  commission, 
the  members  of  which  shall  serve  without  compensation  other  than 
necessary  traveling  expenses,  and  an  appropriation  of  a  sufficient 
sum  to  erect  a  fence  about  the  grounds  and  give  them  proper  care. 

ANDERSONVILLE    MONUMENT. 

Among  the  Union  soldiers  who  died  in  Andersonville  prison 
during  the  Civil  War  were  750  from  Indiana.  But  five  States  in 
the  Union  contributed  more  men  to  the  death  roll  of  that  prison 
than  the  State  of  Indiana.  All  of  these  States,  with  others,  have 
erected  monuments  to  commemorate  the  valor  of  their  soldier  citi- 
zens who  died"  amid  the  horrors  of  a  prison  life  unparalleled  in  hu- 
man history.  These  monuments  have  ranged  in  cost  from 
$6,000.00  by  the  State  of  Rhode  Island  to  $35,000.00  by  the  State 
of  New  York. 

I  recommend  an  appropriation  of  $10,000.00  for  a  monument 
to  be  erected  on  the  prison  site  to  the  memory  of  the  750  heroic 
dead  who  are  buried  there,  and  that  an  act  be  passed  creating  a 
commission,  to  be  appointed  by  the  Governor,  of  five  survivors  of 
the  prison,  to  erect  such  monument,  said  commissioners  to  serve 
without  pay  other  than  their  actual  and  necessary  traveling  ex- 
penses. 

ANTI-LOBBY    LAW. 

Special  interests,  individual  and  corporate,  are  wont  to  exercise 
undue  influence  upon  all  legislation  relating  to  any  matter  of  con- 
cern them.  They  fill  the  legislative  chambers  and  the  approaches 
thereto  with  paid  agents  who  recognize  no  public  interest  which 
conflicts  with  that  of  their  employers.  They  voice  no  thought  or 
wish  beyond  the  "interest"  they  represent.  Their  attitude  is  de- 
scribed with  exactness  in  the  couplet, 

Whose  bread  I  eat, 
His  song  I  sing. 

Such  persons  are  not  safe  counsellors.  They  are  the  enemies 
of  the  people's  interests.  Their  very  presence  is  inimical  to  the 
public  welfare.  Human  rights — the  rights  of  the  individual  citi- 
zen, or  the  rights  of  the  body  of  the  people — are  not  safe  where 
legislation  can  be  procured  or  defeated  or  government  administered 


72 

through  the  corrupt  and  demoralizing  influence  of  the  paid  agents 
of  organized  wealth  and  greed.  Self -respect,  the  good  name  of  the 
State,  and  your  duty  to  the  great  public,  whose  representatives  you 
are  and  which  commissioned  you  to  speak  and  act  for  it,  should  im- 
pel you  to  banish  them  by  affirmative  action  from  these  halls. 
There  are  many  measures  of  unusual  public  import  coming  before 
you  which  profoundly  concern  the  people  and  to  which  many  of 
these  interests  will  be  opposed.  Indeed,  I  am  advised  that  a  num- 
ber of  professional  lobbyists  retained  to  represent  them  are  already 
here. 

An  act  should  be  passed,  under  suspension  of  the  rules,  carrying 
an  emergency  clause,  which  shall  provide  that  every  person  re- 
tained or  employed  for  compensation  as  counsel  or  agent  by  any 
person,  firm,  corporation  or  association  to  promote  or  oppose,  di- 
rectly or  indirectly,  the  passage  of  bills  or  resolutions  by  either 
house,  or  to  promote  or  oppose  executive  approval  of  such  bills  or 
resolutions,  shall  forthwith  file  in  the  office  of  the  Secretary  of 
State  a  written  statement  subscribed  by  himself,  under  oath,  setting- 
out  the  names  of  the  person  or  persons,  firm  or  firms,  corporation  or 
corporations,  association  or  associations  by  whom  or  on  whose  be- 
half he  is  retained  or  employed,  together  with  a  brief  description 
of  the  legislation  in  which  such  service  is  to  be  rendered.  It  should 
also  provide  that  the  Secretary  of  State  shall  keep  an  appearance 
docket,  wherein  the  names  of  all  such  persons,  counsel  or  agents 
shall  be  recorded,  together  with  the  information  contained  in  the 
verified  statement  filed  by  them,  which  record  shall  be  open  to  public 
inspection.  Upon  the  termination  of  such  employment  the  fact  of 
such  termination,  with  the  date  thereof,  should  be  entered,  by  direc- 
tion of  such  counsel,  agent  or  employe.  It  should  also  provide  that 
no  person,  firm,  corporation  or  association  shall  retain  or  employ 
any  person  to  promote  or  oppose  legislation  for  compensation  con- 
tingent in  whole  or  in  part  upon  the  passage  or  defeat  of  any 
measure  or  measures,  and  that  no  person  shall  for  compensation  en- 
gage in  promoting  or  opposing  legislation  except  upon  such  ap- 
pearance duly  entered,  and  that  no  person  shall  accept  any  such 
employment  or  render  any  such  service  for  compensation  contingent 
upon  the  passage  or  defeat  of  any  legislative  measure  or  measures, 
and  that  every  person,  firm,  corporation  or  association,  within  sixty 
days  after  the  adjournment  of  the  General  Assembly,  shall  file  in 
the  office  of  the  Secretary  of  State  an  itemized  statement,  verified  by 
the  oath  of  such  person,  or  in  case  of  a  firm  a  member  thereof,  or  in 
case  of  a  domestic  corporation  or  association  an  officer  thereof,  or 


73 

in  case  of  a  foreign  association  an  officer  or  agent  thereof,  showing 
in  detail  all  expenses  paid,  incurred  or  promised,  directly  or  indi- 
rectly, in  connection  with  the  legislation  pending  at  the  last  pre- 
vious session,  together  with  the  names  of  the  payees  and  the  amount 
paid  each,  including  all  disbursements  of  every  kind  or  character 
paid,  incurred  or  promised  to  counsel  or  agents  and  specifying  the 
nature  of  said  legislation  and  the  interests  of  the  person,  firm,  cor- 
poration or  association  therein. 

The  act  should  also  make  the  violation  of  any  of  its  provisions 
a  crime  and  provide  severe  penalties  as  punishment  therefor.  Duly 
accredited  counsel  or  agents  for  counties,  cities,  towns,  villages, 
public  boards  and  public  institutions  should  be  excepted ;  also  per- 
sons rendering  professional  services  in  drafting  bills  or  in  advis- 
ing clients,  and  in  rendering  advice  as  to  the  construction  or  effect 
of  such  pending  legislation,  where  such  professional  service  is  in  no 
otherwise  connected  with  legislation. 

This  recommendation  is  substantially  in  accordance  with  the 
New  York  law  upon  this  subject.  I  believe  it  will  be  an  effective 
measure,  and  I  urge  its  passage  at  the  earliest  possible  moment. 
The  repetition  of  the  scenes  of  former  }^ears  in  and  about  these 
chambers  can  be  prevented  if  you  desire  to  prevent  them.  You 
have  the  power.  The  responsibility  is  yours. 

RAILROAD    PASSES. 

Two  years  ago  I  urged  upon  the  General  Assembly  the  neces- 
sity of  anti-pass  and  anti-frank  legislation.  None  was  enacted. 
Since  then  we  have  made  great  progress  toward  the  elimination  of 
the  evil.  Public  sentiment  has  been  stirred.  In  the  forum  of  public 
thought  decision  has  been  reached.  The  administrative  offices  of 
the  State  have  ceased  to  be  brokers'  offices  for  the  distribution  of 
such  favors.  State  officers  have  quite  generally  declined  to  use  or 
receive  them,  and  the  National  Congress  has  by  law  prohibited  their 
use  by  public  officials  in  interstate  travel.  The  practice  as  to 
intrastate  travel  can  be  reached  only  through  the  action  of  the 
General  Assembly  of  the  State.  Railways,  telegraph,  telephone 
and  express  companies  are  one  and  all  public  service  corporations. 
Every  citizen  is  entitled  to  use  a  public  service  corporation  under 
like  circumstances  upon  the  same  terms  as  to  cost  and  accommoda- 
tion. Anything  else  is  discrimination,  and  should  be  inhibited  by 
law.  The  whole  practice  is  corrupting  and  demoralizing.  I  there- 
fore repeat  the  recommendation  I  made  in  this  behalf  to  the  Sixty- 
fourth  General  Assembly. 


74 


The  classification  contained  in  the  employers'  liability  law  as 
respects  corporations  other  than  railroads  is  too  narrow,  so  nar- 
row in  fact  as  to  make  doubtful  the  validity  of  the  statute.  The 
purpose  of  the  law  is  the  amelioration  of  the  common  law  co-serv- 
ant rule.  This  act  is  of  such  importance  as  to  entitle  it  to  a  place 
in  the  law  of  the  State.  The  present  statute  has  been  often  con- 
strued by  the  courts.  It  is  now  well  understood.  Its  defects  can 
be  reached  by  amendment.  It  should  not,  therefore,  be  repealed. 

The  classification  mentioned  in  Section  1  should  be  broadened 
so  as  to  include  all  persons,  natural  and  artificial,  except  municipal 
corporations.  Changes  in  the  title  of  the  act  and  in  other  sections 
will  be  necessary  that  they  may  conform  to  the  change  made  in  the 
first  section. 

In  this  connection  I  desire  also  to  commend  to  your  considera- 
tion the  enactment  of  a  statute  that  shall  establish  the  principle  of 
comparative  negligence  in  all  personal  injury  cases.  The  rule  of 
comparative  negligence  is  a  just  and  humane  one.  However  gross- 
ly negligent  the  employer  may  be,  the  employe  is  now  precluded 
from  recovering  damages  in  any  case  where  his  own  negligence 
has  contributed,  however  slight  the  degree,  to  his  own  injury.  This 
is  a  harsh  and  an  unjust  rule.  It  should  be  modified  to  the  extent 
suggested. 

TWO-CENT   FARE. 

With  free  transportation  eliminated  there  is  no  just  reason  why 
the  maximum  passenger  rate  of  steam  railways  in  Indiana  for 
intrastate  travel  should  not  be  fixed  by  law  at  2  cents  per  mile. 
There  should  be  a  provision  that  the  minimum  price  of  a  ticket 
should  not  be  less  than  5  cents.  It  will  also  be  but  just  to  the  rail- 
way companies  that  provision  be  made  permitting  them  to  charge 
a  cash  fare  on  trains,  of  not  to  exceed  &/>>  cents  per  mile  where  the 
passenger  has  been  given  opportunity  by  the  company  to  purchase 
a  ticket  at  a  regular  ticket  office  before  entering  the  cars.  Such 
legislation  will  be  of  substantial  benefit  to  the  traveling  public. 
The  wealth  and  the  population  of  the  State  amply  justify  it.  Its 
operation  will  not  injure  the  railroad  companies.  Their  passenger 
receipts  wrill  not  be  diminished.  The  reduction  of  fare  will  be  off- 
set by  the  increased  travel  resulting  therefrom.  This  has  been  the 
effect  of  similar  legislation  in  other  States,  and  there  is  no  reason 
why  the  effect  should  be  different  here.  I  take  it  you  will  enact  a 
law  in  this  behalf  since  most  of  you  come  with  instructions  from 
your  constituents  to  do  so. 


75 

PRIVATE  BANKS. 

The  Sixty-fourth  General  Assembly  enacted  a  private  banking 
law  which  has  been  construed  by  the  Supreme  Court  and  held  valid. 
The  law,  though  defective  in  many  particulars,  is  a  step  in  the  right 
direction.  Its  greatest  defect  is  the  lack  of  State  supervision  and 
examination. 

I  recommend  that  the  law  be  amended  by  providing  for  State 
supervision  and  examination  of  all  such  banks.  In  fact,  the  whole 
law  relating  to  the  examination  of  banks  should  be  revised.  Bank 
examiners  should  be  appointed  by  the  Auditor  by  and  with  the 
advice  and  consent  of  the  Governor.  They  should  be  provided 
with  fixed  salaries  of  not  less  than  $2,500.00  a  year.  Fees  for  ex- 
amination should  be  graded  substantially  as  they  now  are,  ac- 
cording to  the  capital  of  the  bank,  and  when  collected  they  should 
be  covered  into  the  treasury.  The  law  should  require  at  least  two 
examinations  a  year  of  each  bank,  state  or  private,  and  at  such 
other  times  as  in  the  judgment  of  the  Auditor  an  examination  shall 
be  necessary.  State  examination  of  banking  institutions  is  of  no 
valufr  unless  it  results  in  actual  examination.  This  is  not  obtained 
under  the  present  system.  All  fees  collected  are  now  the  property 
of  the  bank  examiners.  This  presents  constant  temptation  to  the 
examiner  to  make  hurried  examinations.  The  system  is  wrong  and 
should  be  changed. 

INHERITANCE    TAX. 

I  am  thoroughly  convinced  of  the  necessity  and  the  justness 
of  a  law  which  shall  provide  for  the  taxation  of  the  devolution  or 
succession  of  property  by  device  or  inheritance.  The  additional 
revenue  it  will  bring  into  the  treasury  is  needed  in  the  construction 
of  the  institutions  now  under  contract,  and  a  little  later,  if  the 
revenues  of  the  State  exceed  its  needs,  the  tax  levy  for  the  general 
fund  can  be  lowered  and  the  burden  of  taxation  levied  upon  the 
property  of  the  citizens  in  general,  lightened.  Such  a  tax  is  levied 
but  once,  and  that  at  the  time  of  the  succession  or  devolution  of 
property  inherited  or  bequeathed.  It  is  levied  at  a  time  when  it 
can  be  paid  without  hardship.  It  is  an  eminently  just  form  of  taxa- 
tion. It  can  be  administered  with  small  expense  and  collected  with 
little  friction.  In  the  apt  words  of  another  "it  is  collected  with 
ease  and  paid  with  contentment."  It  in  no  way  disturbs  commer- 
cial activities.  It  levies  tribute  upon  no  business  or  industry.  It 
enables  the  State  to  reach  much  intangible  property  which  has  been 
long  sequestered.  It  is  a  tax  which  the  beneficiary  of  the  inherit- 
ance can  not  shift  from  his  shoulders  to  the  backs  of  others.  In- 


76 

deed,  the  tax  is  paid  before  he  receives  the  inheritance.  The  right 
to  inherit  property  or  to  dispose  of  it  by  device  exists  only  by  grace 
of  the  State.  It  is  wholly  an  artificial  right,  resting  solely  upon 
the  authority  and  consent  of  the  State.  In  collecting  it  the  State 
simply  stops  the  inheritance  in  transmission  long  enough  to  take 
from  it  a  fair  and  just  contribution  in  exchange  for  value  already 
had  and  received  by  him  who  accumulated  it,  and  then  passes  it 
on  to  the  beneficiary.  Indeed,  its  validity  and  fairness  are  quite 
generally  admitted.  No  great  fortune  is  the  sole  product  of  the 
man  who  organizes  and  directs  its  accumulation.  It  is  to  some  ex- 
tent the  product  of  a  social  process  to  wrhich  many  persons  con- 
tribute. Every  honest  toiler  contributes  something  to  it  whatever 
the  field  of  his  labor.  The  mechanic,  the  farmer,  the  teacher,  the 
merchant,  the  physician,  the  lawyer,  the  minister  and  the  statesman 
or  the  administrator  of  public  affairs,  whose  work  makes  for  the 
progress  of  society  or  for  the  maintenance  of  the  peace  and  order  of 
the  State,  has  some  share  in  its  production.  The  State  itself  is  but 
society  organized,  and  when  the  owner  of  a  great  estate  dies,  and 
in  the  transmission  of  his  fortune  the  State  takes  toll  out  of  it,  it 
takes  only  what  is  its  own.  And  in  the  taking  of  it,  it  makes  for 
the  wider  diffusion  of  wealth  and  for  the  unity  and  solidarity  of 
society.  Inheritance  tax  laws  have  a  place  in  the  revenue  laws  of 
most  modern  states.  They  are  found  in  the  law  of  Great  Britain, 
Germany,  France,  Switzerland,  Holland,  Belgium,  Norway,  Italy, 
Russia,  Australia  and  Canada.  They  are  imposed  by  the  laws  of 
32  States  of  the  Federal  Union.  The  rate  should  be  progressive, 
increasing  with  the  value  of  the  inheritance,  and  as  to  collateral 
heirs,  it  should  run  from  5  to  25  per  cent.  In  the  following  States 
the  rate  is  progressive  and  is  as  indicated:  California  P/>  to  5 
per  cent.,  Colorado  3  to  6  per  cent.,  Illinois  2  to  6  per  cent.,  Iowa 
5  to  20  per  cent.,  Nebraska  2  to  6  per  cent.,  North  Carolina  I1/*  to 
15  per  cent.,  South  Dakota  2  to  4  per  cent.,  Washington  3  to  12 
per  cent.,  West  Virginia  21/i>  to  7%  per  cent.,  Wisconsin  I1/-?  to  5 
per  cent.  In  the  following  States  the  rate  is  5  per  cent,  or  more: 
Arkansas,  Delaware,  Iowa,  Massachusetts,  Michigan,  Missouri, 
Montana,  New  Hampshire,  New  Jersey,  New  York,  Pennsylvania, 
Tennessee,  Utah,  Vermont,  Virginia  and  Wyoming.  In  Louisiana  it 
is  10  per  cent.  Seventeen  States  include  inheritance  to  direct  heirs 
at  a  rate  running  from  1  to  5  per  cent.,  exempting  inheritances 
varying  in  value  from  $2,000.00  to  $25,000.00.  In  the  States 
heretofore  named  exemptions  of  inheritances  to  collateral  heirs 
are  made  only  where  the  inheritance  is  of  nominal  value.  In  six 


77 

States  the  value  is  less  than  $500.00,  in  9  it  is  $500.00,  and  in  8  no 
exemption  is  made  at  all  as  to  inheritances  to  collateral  heirs.  In 
case  of  inheritances  by  direct  heirs  $20,000.00  is,  in  my  judgment, 
a  reasonable  exemption,  and  in  case  of  inheritance  by  collateral  heirs 
the  exemption  should  not  be  more  than  $1,000.00.  Thirteen  of  the 
American  States  have  enacted  revenue  laws  containing  the  prin- 
ciple of  the  collateral  inheritance  tax  within  the  last  six  years. 
France  derives  $40,000,000.00  a  year  from  this  source,  or  6  per 
cent,  of  its  entire  national  revenue.  Great  Britain  receives  from 
this  source  $70,000,000.00,  or  10  per  cent,  of  its  revenues.  In  11 
months  of  the  year  just  past  Louisiana  received  $86,655.00  from 
this  tax,  Vermont  $40,581.00,  Colorado  $51,236-00,  Maine  $70,- 
000.00,  Iowa  $190,748.00,  Minnesota  $159,455.00,  Missouri 
$212,814.00,  Wisconsin  $103,917.00,  Massachusetts  $712,720.00, 
Illinois  in  the  two  years  last  past  $1,376,264.00,  Pennsylvania  in 
1895,  $1,677,185.00. 

The  income  from  an  inheritance  tax  is  necessarily  irregular  in 
volume,  but  $150,000.00  to  $200,000.00  is  a  conservative  estimate 
of  the  annual  revenue  such  a  law  as  that  here  recommended,  will 
bring  into  the  treasury  of  this  State.  Indiana  has  been  slow  to 
avail  herself  of  this  form  of  taxation.  But  the  time  has  come  when 
the  necessities  of  the  State  require  its  early  enactment.  If  enacted 
it  will  meet  the  approval  of  the  people  and  will  abundantly  justify 
the  wisdom  and  the  foresight  of  those  who  support  it.  It  should 
be  drawn  with  care.  It  should  not  be  imposed  upon  property  in- 
herited either  real  or  personal,  but  upon  the  succession  or  devolu- 
tion thereof.  Such  a  tax  levied  upon  the  transmission  of  the  share 
a  person  receives  from  an  estate,  though  progressive  in  character, 
has  been  uniformly  upheld  by  the  courts,  the  Supreme  Court  of  the 
United  States  saying  in  a  recent  case  (Magoun  v.  Illinois  Trust 
and  Savings  Bank,  170  U.  S.  283)  : 

"The  right  to  take  property  by  devise  or  descent  is  a  creature  of  the  law 
and  not  a  natural  right — a  privilege,  and  therefore  the  authority  which  con- 
fers it  may  impose  conditions  upon  it." 

UNITED    STATES    SENATORS. 

I  believe  a  great  majority  of  the  people  of  the  State  are  in 
favor  of  an  amendment  to  the  Federal  Constitution  which  shall  pro- 
vide for  the  election  of  United  States  Senators  by  the  direct  vote 
of  the  people.  A  convention  was  recently  called  by  the  Governor 
of  the  State  of  Iowa  under  provision  made  by  the  late  General 
Assembly  of  that  State,  for  the  purpose  of  considering  how  such 


78 

an  amendment  could  be  secured.  The  convention  was  held  in  the 
city  of  Des  Moines.  Upon  invitation  from  the  Executive  of  Iowa, 
I  appointed  five  members  of  the  present  General  Assembly  as  dele- 
gates to  represent  the  State  of  Indiana  at  such  convention,  all  of 
whom  attended  and  bore  honorable  part  in  its  deliberations.  It  is 
hoped  the  convention  may  be  the  means  of  securing  such  uniform- 
ity of  action  on  the  part  of  the  General  Assemblies  of  a  sufficient 
number  of  the  States  either  to  secure  the  adoption  of  such  an 
amendment  by  Congress  and  its  submission  to  the  States  for  ratifi- 
cation, or  to  require  the  calling  of  a  constitutional  convention  for 
the  consideration  of  amendments  to  the  Constitution,  which,  when 
ratified  by  three-fourths  of  the  States,  shall  become  a  part  thereof. 
I  commend  the  subject  to  your  consideration  in  the  hope  that 
you  will  take  favorable  action  thereon  before  the  present  session 
shall  close. 

PRIMARY  ELECTIONS. 

I  commend  to  your  consideration  the  enactment  of  a  primary 
election  law  which  shall  be  simple  in  the  method  it  provides  and 
which  shall  require  the  nomination  of  all  candidates  for  city  and 
county  offices,  of  every  political  party,  and  the  selection  of  all  dele- 
gates to  any  convention  held  by  any  political  party  for  the  pur- 
pose of  nominating  candidates  for  any  public  office,  to  be  made  by 
direct  primaries. 

TRUSTS. 

There  is  need  of  legislation  conferring  upon  the  Attorney- 
General  authority  to  proceed  against  unlawful  combinations  of 
capital  and  against  corporations  chartered  by  the  State  in  all  cases 
where  they  abuse  the  power  conferred  upon  them  by  the  State. 

The  Attorney-General  has  prepared  a  comprehensive  act  upon 
this  subject  which  I  believe  is  essential  to  the  enforcement  cither  of 
the  common  law  or  of  any  legislation  relating  to  trusts  which  you 
may  enact.  I  commend  it  to  your  consideration. 

In  addition  to  the  act  referred  to,  there  should  be  legislation 
relating  directly  to  the  subject  of  trusts  or  combinations  of  capital 
having  for  their  purpose  the  elimination  of  competition  or  the  con- 
trol of  prices.  This  legislation  should  be  along  the  lines  of  the 
Federal  statutes  upon  this  subject,  in  so  far  as  they  are  applicable 
to  conditions  in  this  State.  These  laws  have  been  construed  by  the 
Federal  courts,  and  have,  been  found  to  be  effective  wherever  those 
charged  with  the  duty  of  enforcing  them  have  in  good  faith  sought 
their  enforcement, 


79 

PUBLIC  DEPOSITORIES. 

The  events  of  the  last  two  years  have  emphasized  the  necessity 
of  reform  in  the  methods  of  handling  and  caring  for  public  funds. 
Sums  of  money,  varying  in  the  aggregate  from  $13,000,000  to 
$35,000,000,  are  constantly  in  the  hands  of  public  officials  of  In- 
diana— state,  county,  city,  town  and  township. 

At  the  present  time  these  funds  are  not  and  for  years  past 
have  not  been  in  the  vaults  of  the  several  public  treasuries,  but  are 
and  have  been  either  on  deposit  in  the  banking  and  financial  insti- 
tutions of  the  State  or  loaned  to  individuals  or  corporations  by  the 
officers  having  their  care  and  custody,  for  their  personal  profit.  The 
system  has  led  to  many  abuses,  some  of  which  have  been  criminal 
in  character.  The  funds  are  often  deposited  in  banks  insolvent  and 
tottering  to  their  fall,  or  are  loaned  to  persons  unable  to  repay 
them  when  needed,  or  invested  in  speculative  enterprises,  the  result 
of  which  is  often  personal  loss  to  the  officials  and  their  bondsmen 
and  not  infrequently  to  the  public  as  well.  In  many  instances  such 
officers  have  speculated  with  the  public  funds  entrusted  to  them  un- 
til they  have  drifted  beyond  return,  and  have  been  compelled  to 
stand  before  their  respective  communities  as  embezzlers  and  crim- 
inals, and  sometimes  in  the  end  to  expiate  their  fault  by  a  term 
in  the  State  Prison.  The  presence  of  large  sums  of  money,  for 
which  there  is  no  immediate  public  demand  or  necessity  of  account- 
ing, is  a  temptation  which  many  well-meaning  but  weak  officials 
find  themselves  unable  to  resist. 

Opportunity  to  secure  the  control  of  these  funds  is  equally 
tempting  to  many  banking  officials.  To  obtain  their  control  they 
dominate  conventions  and  elections  through  corrupt  and  demoral- 
izing methods  which  strike  at  the  very  heart  and  center  of  the  civic 
integrity  of  their  communities.  Some  of  the  most  demoralizing 
spectacles  in  Indiana  political  history  have  been  due  to  the  cam- 
paigns between  rival  financial  institutions  whose  ultimate  object 
has  been  the  control  of  the  public  funds.  Their  candidate  once 
nominated  and  elected,  he  becomes  a  chattel  in  their  hands. 

Interest  accruing  upon  the  funds  loaned  or  deposited  has  been 
considered  to  be  and  treated  as  the  money  of  the  official — a  part 
of  the  legitimate  perquisites  of  the  office.  The  whole  system,  from 
beginning  to  end,  is  so  demoralizing  and  ruinous  that  the  public 
conscience  has  become  thoroughly  aroused  and  the  people,  without 
regard  to  party  affiliation,  expect  you  to  enact  legislation  that 
will  destroy,  it. 

In  recommending  remedial  legislation  in  this  behalf,  I  can  not 


80 

go  into  details ;  but  I  submit  what  seem  to  me  to  be  the  essential 
features  of  any  legislation  upon  this  subject. 

Daily  settlements  and  payments  of  all  moneys  received  by  any 
officer  into  the  proper  treasury  is  the  first  essential  step.  The  se- 
lection of  depositories  for  the  funds  is  the  second.  Requirement 
that  all  public  moneys  in  the  hands  of  treasury  officials  shall  be 
daily  deposited  in  the  depositories  selected  is  the  third.  Provi- 
sion that  all  interest  accruing  shall  belong  to  the  public  and  be 
paid  into  the  public  treasuries  is  the  fourth. 

In  the  creation  of  the  new  system  there  are  certain  controlling 
fundamental  purposes  which  should  be  kept  in  mind:  First,  the 
end  of  personal  favoritism  and  of  political  banking;  second,  the 
saving  of  public  officials  from  the  opportunity  and  the  temptation 
to  misuse  the  funds  entrusted  to  their  care ;  third,  the  safety  of  the 
funds ;  fourth,  the  saving  to  the  public  of  the  interest  accruing 
thereon. 

These  purposes  can  be  effected  best  by  providing  for  the  cre- 
ation of  finance  boards  or  boards  of  control  for  state,  county  and 
city,  with  power  to  select  depositories  from  the  banks  and  trust  com- 
panies of  the  State,  under  such  restrictions  as  will  eliminate  favor- 
itism and  political  consideration  ;  by  providing  a  minimum  and  max- 
imum rate  of  interest  of  not  less  than  8  nor  more  than  S^/2  per  cent., 
or  by  establishing  a  level  rate  of  2^/2  Per  cent,  for  all  active  funds 
and  of  3  per  cent,  on  all  dormant  or  permanent  funds ;  by  provid- 
ing that  collateral  securities,  such  as  United  States,  state,  county 
or  city  bonds  shall  be  accepted  as  security  for  the  repayment  of 
deposits,  together  with  such  other  securities  of  fixed  and  perma- 
nent value  as  may  be  obtainable;  or,  in  lieu  thereof,  a  surety  or 
trust  company  bond. 

The  volume  of  the  public  funds  is  so  great  that  state,  county 
and  city  bonds  cannot  be  had  in  sufficient  amount  to  enable  the 
banks  to  qualify,  if  they  are  made  the  sole  receivable  securities. 

I  believe  these  provisions  to  be  fundamental  requirements.  The 
details  must  be  thought  out  with  intelligent  care,  keeping  in  mind 
the  essential  purposes  of  the  legislation  and  the  fact  that  the  plan 
adopted  shall  be  as  simple  as  the  nature  of  the  subject  will  permit. 

INSURANCE   LEGISLATION. 

The  establishment  of  a  strong,  well-equipped  insurance  depart- 
ment is  essential,  but  no  fair-minded  man  can  read  the  report  of 
the  committee  investigating  insurance  conditions  in  this  State  and 
believe  that  the  establishment  of  such  a  department  will  be  of 


81 

itself  sufficient  to  correct  the  abuses  which  have  characterized  and 
still  are  characterizing  the  management  of  certain  Indiana  com- 
panics.  Something  more  than  that  is  necessary.  There  must  be 
remedial  legislation  of  a  character  to  reach  the  root  of  the  abuses 
and  put  an  end  thereto.  The  suggestion  that  such  legislation  be 
enacted  has  met  with  some  criticism,  but  it  has  come  in  the  main 
from  or  been  instigated  by  those  who  are  mismanaging  the  com- 
panies in  question.  They  have  industriously  sought  to  persuade  the 
public  that  such  suggestions  are  attacks  upon  the  companies,  made 
for  the  purpose  of  injuring  them.  It  is  important  to  understand  in 
the  beginning  that  the  remedial  legislation  recommended  means  no 
such  thing.  It  is  not  an  attack  upon  the  companies,  but  upon  the 
abuses  in  their  management  and  upon  the  individual  officials  who 
are  guilty  of  mismanagement.  It  does  not  mean  the  injury  of 
the  companies.  It  means  their  preservation.  The  work  of  the 
investigating  committee  was  not  undertaken  in  nor  conducted  with 
malice  toward  any  domestic  company  nor  for  the  purpose  of  work- 
ing harm  to  any  such  company.  It  was  undertaken  and  conducted 
to  ascertain  actual  conditions  touching  life  insurance  and  in  the 
hope  that  abuses,  if  found,  could  be  ended  and  the  companies  saved 
to  the  people  of  the  State.  You  will  search  in  vain  for  a  sentence 
or  a  word  in  all  the  report  of  the  committee  indicating  either  a  ma- 
licious purpose  or  revengeful  spirit.  Facts  have  been  ascertained 
and  given  to  the  people  of  the  State.  The  truth  has  been  learned 
and  plainly  but  kindly  told.  The  good  and  the  bad  in  the  manage- 
ment of  the  companies  have  been  set  forth  with  equal  care  and  ac- 
curacy. The  good  has  been  approved  and  the  bad  condemned,  and 
thoughtful,  well  considered  recommendations  made  looking  to  its 
elimination.  The  mistake  the  gentlemen  who  are  opposing  these 
recommendations  have  made  and  are  still  making  is  in  thinking 
themselves  the  companies.  They  are  not.  They  are  simply  trus- 
tees. The  policy  holders  constitute  the  companies. 

The  desire  of  the  committee  and  of  the  Executive  is  that  the 
$23,000,000.00  annually  paid  for  insurance  by  the  people  of  In- 
diana may  so  far  as  possible  be  paid  to  domestic  companies  and 
kept  at  home  to  meet  the  industrial  and  commercial  demands  of 
our  own  people. 

The  motive  which  prompted  the  committee  *in  its  work  is  well 
expressed  in  its  own  language : 

"We  believe  that  it  is  the  duty  of  the  State  to  so  regulate  and  foster  the 
business  of  Indiana  companies  as  to  command  the  retention  in  Indiana  of  a 
large  portion  of  this  great  volume  of  money.  There  is  no  reason  why  the  in- 

[6—19891] 


82 

surance  business  cannot  be  as  well  conducted  in  Indiana  as  in  New  York, 
Philadelphia  or  Hartford.  The  presence  of  these  accumulations  of  money  in 
the  communities  means  large  local  investments  of  it  in  business,  and  the  conse- 
quent development  of  the  financial  and  industrial  institutions  of  the  State. 

"Money  will,  however,  seek  its  best  investment,  and  State  pride  will  not 
divert  this  golden  stream  unless  investors  in  insurance  feel  that  Indiana  com- 
panies offer  as  good  returns  for  the  cost  as  are  offered  by  like  institutions 
elsewhere.  The  Indiana  companies,  to  command  their  share  of  the  business  of 
the  country,  must  have  such  regulation  from  the  State  and  such  management 
within  their  home  office,  as  will  insure  their  integrity  to  the  public.  An  In- 
diana institution  found  to  be  guilty  of  dishonest  methods,  extravagant  ex- 
penditures and  reckless  'wild-catting,'  should  be  put  out  of  business  for  the 
credit  of  the  State  and  the  security  of  her  citizens.  An  Indiana  institution 
which  adopts  correct  methods,  is  economical  in  expenditures,  and  honest  with 
the  public,  should  receive  such  support  from  the  entire  State  as  would  insure 
its  success  and  usefulness." 

We  have  realized  what  seems  to  us  to  be  so  apparent  that  all 
must  see  it,  that  to  retain  any  considerable  portion  of  the  vast  sum 
of  money  paid  for  insurance  each  year  by  Indiana  people,  there 
must  be  built  up  in  Indiana  insurance  companies  founded  upon 
sound  principles  and  correct  actuarial  bases  and  that  to  these  must 
be  added  careful,  economical  and  honest  management  in  adminis- 
tration. In  so  far  as  these  conditions  obtain  Indiana  companies  will 
command  the  confidence  of  Indiana  people,  but  in  so  far  as  they 
are  omitted  they  will  only  abuse  the  confidence  of  their  policy  hold- 
ers, and  if  persisted  in,  will,  in  the  end,  entail  shame  and  loss  upon 
the  people  of  the  whole  State.  It  is  insisted  by  those  who  have  been 
and  are  profiting  by  mismanaging  some  of  the  domestic  companies 
that  solvency  of  the  companies  is  sufficient.  It  is  contended  if,  not- 
withstanding mismanagement,  extravagant  expenditures  in  the 
way  of  salaries,  rebates,  special  contracts  and  agency  company 
commissions,  and  the  misappropriations  of  funds,  the  companies 
are  still  solvent,  that  the  policy  holders  should  be  satisfied,  and  that 
no  remedial  legislation  should  be  enacted. 

Solvency  is,  of  course,  the  first  consideration,  but  there  are  two 
other  considerations,  second  in  importance  only  to  that  of  solvency, 
viz. : — honest  and  economical  administration  of  the  companies'  af- 
fairs and  equitable  treatment  of  all  policy  holders.  Every  policy 
holder  is  concerned  not  only  in  the  solvency  of  the  companies,  but 
in  the  economy  and  integrity  of  their  administration  and  in  the 
profit  distributed  to  him.  Remedial  legislation  means  an  end  to  ex- 
travagant salaries  and  excessive  commissions,  to  rebates  and  to  dis- 
criminating dividends  on  special  contracts.  It  means  annual  dis- 
tribution of  the  surplus  of  the  several  companies  and  fidelity  of 
service  on  the  part  of  the  company  officials. 


83 

The  directors  and  officers  of  an  insurance  company  occupy  a 
clear  and  unequivocal  position.  Their  relation  is  purely  fiduciary. 
They  are  the  trustees  of  the  policy  holders.  The  trust  committed 
to  them  is  a  sacred  one,  calling  for  scrupulous  integrity,  great 
ability  and  high  purpose.  Neither  directors  nor  officers  have  any 
moral  right  to  vote  salaries  to  themselves  beyond  the  point  of  fair 
compensation  for  services  rendered  or  to  incur  expenses  in  any  de- 
partment except  for  the  benefit  of  the  policy  holder.  It  is  impos- 
sible to  reconcile  the  conduct  of  the  managers  of  some  of  our  do- 
mestic companies  with  this  statement  of  their  duties.  They  have 
been  keenly  alive  to  their  own  selfish  interests,  but  oblivious  to  their 
duty  to  the  policy  holder  whose  trustees  they  .are.  They  have 
seemed  unwilling  to  consider  the  interest  of  the  policy  holder  a 
single  point  beyond  that  involved  in  the  solvency  of  the  company. 

One  of  these  companies  during  the  year  1905  expended  $42.27 
out  of  every  $100.00  of  premium  income  it  received,  to  defray  the 
cost  of  administration.  The  money  so  expended  was  46  per  cent, 
of  its  entire  cash  premium  income,  42  per  cent,  of  its  entire  cash 
income,  and  66  per  cent,  of  its  entire  cash  disbursements.  Another 
expended  $51.10  out  of  each  $100.00  of  premium  income  it  re- 
ceived, to  defray  the  cost  of  administration,  or  88  per  cent,  of  its 
entire  cash  premium  income,  85  per  cent,  of  its  entire  cash  income, 
and  85  per  cent,  of  its  entire  cash  disbursements. 

Other  competing  Indiana  companies  organized  and  doing  busi- 
ness under  like  conditions  were  able  the  same  year  to  administer 
their  affairs  for  $20.00,  $20.10,  $21.30,  and  $21.97  out  of  every 
$100.00  of  premium  income  they  received.  The  two  companies  first 
referred  to  have  averaged  for  the  past  five  years  an  expenditure  of 
$41.20  and  $33.40,  respectively,  out  of  each  $100.00  of  premiums 
paid  them,  for  administrative  purposes  alone.  During  the  same 
period  other  companies  have  been  able  to  administer  their  affairs 
for  $20.60,  $20.20,  $19.70,  $18.90,  $18.70,  $18.60,  $18.20, 
$18.10,  $16.60,  $14.40  and  $13.70,  respectively,  out  of  every 
$100.00  of  premiums  paid  them.  The  average  expenditure  for  one 
of  these  companies  for  five  years  is  exceeded  only  by  those  of  one 
other  company  in  all  the  United  States.  The  margin  disclosed  by 
these  figures  between  the  expenditures  for  administrative  purposes 
by  these  two  companies  and  the  expenditures  for  such  purposes  by 
other  companies  is  so  great  as  to  lead  inevitably  to  the  conclusion 
that  there  has  been  extravagance  and  mismanagement  in  their 
administration.  We  are  not,  however,  confined  to  inference  in  the 
case  of  these  two  companies.  There  is  ample  fact  and  figure. 


84 

During  the  year  1905  the  president  of  one  of  these  companies 
received  a  salary  of  $10,000.00,  the  second  vice-president  a  salary 
of  $6,000.00,  the  general  manager  a  salary  of  $7,200.00,  the  sec- 
retary $4,200,  the  vice-president  $4,200.00  and  the  superintendent 
of  agencies  $4,000.00.  The  expenses  for  salaries  at  the  home  office 
alone  aggregated  $59,793.00.  Under  the  pressure  of  publicity 
these  salaries  have  been  reduced,  the  president's  to  $4,000,  the  vice- 
president's  and  superintendent  of  agencies'  to  $3,000.00,  the  secre- 
tary and  treasurer's  to  $2,100.00,  and  a  number  of  offices  abolished. 
The  total  expenses  of  salaries  at  the  home  office  for  the  year  1906 
were  $22,120.00,  a  reduction  in  salaries  in  a  single  year  of  $37,- 
673.00.  This,  it  seems  to  me,  is  conclusive  proof  of  past  extrava- 
gance and  mismanagement.  In  the  year  1905  the  other  company 
paid  its  president  a  salary  of  $20,000.00,  its  secretary  $20,000.00, 
its  vice-president  and  superintendent  of  agents,  $20,000.00 ;  its 
general  counsel  and  director  a  salary  of  $9,000.00  and  other  allow- 
ances aggregating  $11,000.00,  making  $20,000.00  in  all,  counsel 
for  its  loan  department  and  director  a  salary  of  $1,500.00  and 
other  allowances  of  $6,500.00,  making  a  total  of  $8,000.00,  and 
its  medical  director  a  salary  of  $4,375.00 — total  home  office  expense 
in  wages  and  salaries  of  $150,846.37.  The  same  company  is  now 
paying  its  president  a  salary  of  $16,000.00,  its  secretary  and  ac- 
tuary $16,000.00,  its  vice-president  and  manager  of  agents  $16,- 
000.00,  its  vice-president  and  general  counsel,  $16,000,  and  coun- 
sel for  its  loan  department,  $7,000.00.  It  is  important  that  the  of- 
ficers of  these  companies  receive  adequate  compensation  for  services 
rendered,  but  the  salaries  paid  are  extortionate  and  in  some  instances 
more  than  double  the  value  of  their  services.  It  is  impossible  to 
reconcile  the  voting  of  such  salaries  to  themselves  by  persons  hold- 
ing the  relation  these  officials  hold  to  the  policy  holders,  with  their 
duty  as  such  officials.  In  the  light  of  the  following  formal  resolu- 
tion, adopted  by  the  board  of  directors  of  this  company  on  Jan- 
uary 28,  1904,  the  act  becomes  easy  of  explanation,  especially 
when  we  remember  that  the  executive  officers  to  whom  these  salaries 
were  voted  were  themselves  the  board  of  dirctors : 

"Resolved,  That  under  the  direction  of  the  Board  of  Directors,  the  proxies 
of  policy  holders  be  secured,  authorizing  Mr.  Samuel  Quinn  to  vote  for  the 
same  policy  holders  at  all  meetings  of  members;  and  in  case  of  his  death  or 
absence,  said  proxies  to  be  voted  by  Mr.  Andrew  M.  Sweeney. 

"It  is  the  purpose  and  spirit  of  this  resolution  that  said  proxies  be  used 
for  the  perpetuation  of  the  present  members  of  the  board  of  directors  as  long 
as  they  live  and  desire  membership  on  the  board." 


85 

This  company  has  greatly  added  to  the  cost  of  administration 
by  issuing  a  large  number  of  special  contracts  providing  for  the 
payment  of  discriminative  dividends  for  services  that  were  never 
rendered  and  never  intended  to  be  rendered. 

These  contracts  cost  the  company  in  1905  $136,523.84,  and  a 
yet  greater  sum  in  1906.  The  company  was  organized  September 
24,  1894.  In  a  little  less  than  12  years  its  special  contracts  cost 
it  $632,459.93.  In  July,  1906,  $37,515,000  of  its  outstanding  in- 
surance, or  46.8  per  cent,  of  the  entire  volume  of  insurance  carried 
on  its  books,  was  of  this  character.  Another  company,  organized 
April  1,  1899,  has  $14,909,250  of  insurance  covered  by  similar 
contracts,  or  74.5  per  cent,  of  the  entire  volume  of  insurance  car- 
ried upon  its  books.  Up  to  July,  1906,  these  contracts  cost  it  $63,- 
916.24,  $20,544.95  of  which  were  paid  out  in  the  year  1905.  An- 
other company,  organized  in  March,  1897,  is  carrying  $11,683,400 
of  special  contract  insurance,  being  88  per  cent,  of  all  the  insurance 
upon  its  books.  These  contracts  up  to  September,  1906,  had  cost  it 
$39,028.07.  Another  has  89.9  per  cent,  of  its  entire  volume  of 
business  written  under  special  contracts ;  another,  98.7  per  cent. ; 
another,  100  per  cent.,  and  yet  another,  100  per  cent. 

These  contracts,  almost  without  exception,  require  the  insured 
to  render  certain  services  in  the  way  of  securing  business,  answer- 
ing inquiries  and  making  investigations  or  inspections  for  the  com- 
pany. On  their  face  they  import  a  consideration  in  the  way  of 
service,  which,  if  actually  rendered  as  required,  would  make  them 
valid  contracts,  but,  as  a  matter  of  fact,  the  services  specified  are 
rarely,  if  ever,  rendered.  Most  of  the  companies  frankly  admit 
that  the  services  are  not  required  or  requested.  The  simple  truth  is, 
that  it  was  never  the  intention,  cither  of  the  managers  of  the  com- 
pany, or  of  the  persons  insured,  that  any  services  whatever  should  be 
rendered.  The  contracts  were  offered  prospective  policy  holders 
as  a  special  inducement  to  take  insurance,  and  the  companies  have 
not  attempted  to  put  or  keep  them  in  operation  as  service  con- 
tracts. 

In  the  language  of  the  committee : 

"The  contracts,  almost  without  exception,  recite  certain  services  in  the  way 
of  securing  business,  answering  inquiries,  and  making  investigations  or  in- 
spections for  the  company  writing  the  contracts  which  the  holder  is  required 
to  render.  The  dividends  or  commissions  are  to  be  paid,  with  very  few  excep- 
tions, from  a  fund  derived  by  levying  a  tax  of  so  much  per  thousand  annually 
on  all  insurance  in  force  which  was  written  during  certain  specified  periods. 
The  aggregate  fund  derived  from  a  certain  levy  upon  insurance  written  in  a. 


86 

certain  time  is  divided  pro  rata  among  a  limited  number  of  policy  holders 
who  have  special  contracts,  and  is  remitted  to  them  by  deducting  from  the 
annual  renewal  premiums  upon  their  policies.  About  one-half  the  'Special 
Contracts'  have  a  tontine  feature  providing  that  upon  death  or  lapse  of  each 
member  of  the  class,  his  portion  shall  go  to  the  survivors.  The  holders  of  the 
'Special  Contracts'  are  given  such  names  as  Advisory  Agents,  Trustees,  Char- 
ter Members,  Counselors,  Executive  Agents,  Trustee  Counselors,  District  Re- 
porters, Local  Inspectors,"  etc.  *  *  * 

"Nearly  all  of  the  companies  have  issued  more  than  one  series  of  such  con- 
tracts. The  policy  holder  who  secures  a  'Special  Contract'  is  delivered  an  in- 
strument with  all  the  trimmings  of  a  government  or  municipal  bond  and  which 
states  that  the  membership  in  his  particular  class  is  limited  to  300  or  500, 
or  such  number  as  may  have  been  decided  upon,  and  he  is  led  to  believe  that 
he  is  one  of  a  favored  class  whose  renewal  premiums  shall  be  annually  re- 
duced by  taxation  of  the  premiums  of  his  fellow  mutual  policy  holders.  If 
he  hesitates  at  the  agreement  to  render  such  large  services  as  are  stated  in 
the  'Special  Contract,'  he  is  often  told  that  the  services  will  not  be  actually 
required  of  him,  but  that  this  is  a  method  of  the  company  which  it  must  use  in 
order  to  give  him  the  particular  advantage.  In  most  cases  he  is  also  shown  an 
'estimate'  which  indicates  that  his  premiums  will  be  reduced  annually  until  at 
a  certain  time,  varying  with  the  judgment  and  scruples  of  the  company  print- 
ing the  'estimate,'  his  premiums  will  be  entirely  overcome  by  the  dividends  on 
his  'Special  Contract,'  and  from  that  time  on  he  will  receive  cash  payments 
from  the  company  instead  of  being  required  to  pay  his  annual  premiums  to 
maintain  his  insurance,  as  his  brethren  in  the  mutual  company  are  required  to 
do.  In  a  very  few  forms  of  contract  it  is  provided  that  such  excess  shall  be 
paid  to  him  in  additional  insurance.  The  increase  in  annual  dividends  is  ex- 
pected to  be  produced  in  cases  possessing  the  tontine  or  survivorship  feature 
from  two  sources:  First,  a  decrease  in  the  class  of  beneficiaries,  and  second, 
an  increase  in  the  volume  of  business  to  be  taxed  for  production  of  the  fund. 
In  case  of  contracts  possessing  no  tontine  feature,  its  increase  must  come  from 
increased  volume  alone;  many  of  these  non-tontine  contracts  are  written  so 
as  to  carry  the  idea  that  the  survivors  take  the  whole  fund  produced,  although 
this  is  technically  not  true.  The  estimates  exhibited  to  purchasers,  however, 
convey  the  impression  that  tontine  or  increasing  profits  will  be  received 
whether  or  not  the  actual  language  of  the  contract  is  of  a  tontine  character. 
The  viciousness  of  the  contract  always  present  is  that  it  offers  the  highest 
compensation  at  times  when  the  least  service  is  likely  to  be  rendered,  viz.,  in 
the  later  years  of  the  life  of  the  contract.  The  holder  of  the  contract  is  led 
to  believe  that  he  is  securing  a  very  great  advantage  over  his  fellow  policy 
holders,  and  the  investment  as  presented  is  very  attractive. 

"It  is  well  known  that  the  'estimates'  made  by  the  companies  at  the  time 
of  the  issue  of  these  'Special  Contracts'  have  fallen  far  short  in  realization." 

As  to  the  expense  of  these  contracts,  the  committee  well  says : 

"The  cost  to  the  company  of  the  dividends  to  'Special  Contract'  holders 
is  reported  by  all  the  companies  to  have  been  charged  to  expense  fund,  and  it 
so  appears  in  all  of  their  annual  reports,  although  usually  not  separate  so  as 
to  be  identified.  The  cost  to  the  companies  who  have  had  'Special  Contracts' 


87 

outstanding  for  a  number  of  years,  however,  has  grown  to  such  proportions 
that  it  is  making  a  dangerous  inroad  upon  the  portion  of  the  current  pre- 
miums which  can  be  legitimately  devoted  to  expense,  and  strenuous  efforts 
are  being  made  to  secure  cancellation  of  many  of  the  most  expensive  contracts, 
and  the  substitution  therefor  of  some  different  form  of  insurance  contract. 
The  annual  cost  to  the  companies  has  varied  from  a  few  hundred  dollars,  in 
case  of  the  companies  having  'Special  Contracts'  outstanding  for  no  more 
than  one  year,  to  over  $136,000  in  1905  in  case  of  the  State  Life  Insurance 
Company,  which  wrote  a  great  many  'Special  Contracts'  early  in  its  history. 
"The  annual  tax  assessed  upon  premiums  accruing  from  the  class  of  con- 
tracts subjected  to  the  levy  varies  from  25  cents  per  thousand  to  $1.50  per 
thousand  in  force  during  that  period,  and  within  the  geographical  limits  de- 
termined upon,  and  the  levy  is  to  be  continued  for  from  ten  to  thirty  years, 
depending  upon  the  terms  of  the  particular  contract." 

The  effect  of  these  contracts  is  clearly  set  forth  by  the  commit- 
tee in  the  following  extract  from  its  report : 

"We  think  it  is  apparent  from  the  foregoing  data  and  detailed  description 
that  the  Indiana  companies  have,  in  their  anxiety  to  secure  business,  issued  a 
large  number  of  contracts  carrying  extraordinary  obligations  which  will,  as 
time  goes  on,  make  a  more  and  more  embarrassing  draft  upon  the  fund  which 
the  companies  could  otherwise  legitimately  save  to  surplus.  It  is  apparent  that 
the  cost  of  these  contracts  increases  as  the  amount  of  business  written  within 
the  specified  time  accumulates  and  as  the  issue  of  special  contracts  are  written 
to  their  full  limit.  That  some  of  the  companies  appreciate  the  great  draft 
which  is  to  be  made  upon  their  resources  by  this  class  of  business  is  shown  by 
the  strenuous  efforts  being  made  to  substitute  different  contracts  for  them  at 
any  reasonable  cost.  It  is  evident  that  the  companies  in  their  early  anxiety 
to  make  a  large  showing  of  business  failed  to  anticipate  the  inevitable  mathe- 
matical results  of  these  contracts.  They  may  apologize  for  and  explain  them 
as  they  will,  but  the  fact  remains  that  the  estimates  upon  which  they  were 
sold  were  absolutely  impossible  of  fulfillment  to  the  policy  holder,  thereby 
bringing  to  him  year  by  year  disappointing  results,  while  on  the  other  hand 
the  unfair  advantage  actually  secured  to  the  holders  of  special  contracts 
will  accumulate  to  such  amounts  as  will,  from  year  to  year,  embarrass  and  dis- 
credit the  business  and  methods  of  the  companies.  It  is  only  the  proverbial 
'reaping  of  the  whirlwind.' " 

As  to  the  legality  of  these  contracts,  I  submit  the  following 
statement  from  the  report  of  the  committee : 

"The  legality  of  these  contracts  is  defended  by  the  companies  upon  the 
authority  of  Muller  v.  State  Life  Insurance  Company,  27  Ind.  App.  45,  in  which 
the  Appellate  Court  of  our  State  decides  that  such  a  contract  is  not  void.  It 
does  not  appear  from  a  reading  of  that  decision  that  any  facts  were  presented 
to  the  court  going  to  the  performance  of  the  contract.  A  single  contract 
was  presented  to  the  court  for  its  inspection.  The  court  decided  that  the  con- 
tract imported  a  valid  consideration,  and  that  therefore  it  was  a  valid  con- 
tract. We  do  not  believe,  however,  that  if  it  had  been  shown  to  the  court  by 
the  record  that  a  large  number  of  special  contracts  had  been  issued,  which 


88 

contracts  were  written  so  as  to  import  a  consideration  that  it  was  intended 
should  never  be  required  or  delivered,  that  the  court  would  have  held  that 
the  holders  of  the  special  contracts  could  be  lawfully  paid  their  annual  divi- 
dends where  the  consideration  of  the  class  of  contracts  actually^  failed.  We 
are  inclined  to  believe  that  if  it  were  made  to  appear  to  a  court  having  under 
consideration  such  a  contract,  that  the  contract  was  issued  in  the  course  of 
a  practice  engaged  in  by  a  large  number  of  companies  whereby  they  issued  not 
a  few  but  thousands  of  such  contracts  purporting  on  their  face  to  be  service 
contracts,  but  as  a  matter  of  fact  they  were  only  special  inducements  oifered 
to  a  favored  class  of  individuals  in  order  to  secure  a  larger  volume  of  insur- 
ance at  an  actual  expense  to  the  unfavored  policy  holders,  and  if  it  should  ap- 
pear to  the  court  that  the  issue  of  a  series  of  such  contracts  was  in  itself  a 
subterfuge  and  an  indirect  means  of  making  a  palpable  discrimination  among 
members  of  a  mutual  concern,  the  court  would  treat  the  contracts  as  void. 
We  have  no  criticism  to  make  of  the  decision  rendered  by  the  court  in  Muller 
v.  State  Life  Insurance  Company,  27  Ind.  App.  45,  because  that  decision  was 
made  on  the  facts  as  they  appeared  in  the  record.  We  believe,  however,  that 
if  the  actual  facts  and  circumstances  as  they  existed  in  connection  with  the 
issue  of  what  are  known  as  special  contracts,  excepting  in  a  limited  number  of 
instances,  had  come  before  the  court,  the  language  used  by  the  Appellate  Court 
in  the  case  of  Robison  v.  Wolf,  27  Ind.  App.  683,  would  probably  have  been 
applied.  In  that  case  it  was  decided  that  a  'combination  contract'  whereby 
a  mutual  accident  insurance  company  in  consideration  of  the  payment  of  one 
full  annual  premium  selects  insured  as  one  of  500  policy  holders  to  be  insured 
for  a  like  amount  to  participate  in  a  special  renewal  dividend  on  all  insurance 
written  in  the  State  for  a  period  of  ten  years,  such  dividend  to  be  applied  to- 
ward the  payment  of  the  year's  premium,  was  void.  The  special  contract  in 
that  case  provided  for  no  duties  to  be  performed  by  the  favored  member  which 
were  not  required  by  the  by-laws  of  all  members.  The  court  there  held  that 
since  the  special  dividends  were  promised  to  the  favored  policy  holders  without 
any  consideration,  that  the  contract  was  in  itself  void  and  unenforceable,  that 
it  was  not  only  forbidden  by  statute,  but  was  contrary  to  public  policy." 

Fewer  special  contracts  are  being  issued  by  two  or  three  of  the 
larger  Indiana  companies  than  formerly,  but  on  the  whole  the 
number  being  issued  in  the  State  is  on  the  increase,  notwithstand- 
ing recent  publicity  showing  the  impropriety  of  such  contracts. 
Two  companies  organized  within  the  last  year  have  issued  a  spe- 
cial contract  with  every  policy  written.  The  methods  of  one  of 
these  companies  is  forcefully  set  forth  in  the  committee's  report : 

"In  selling  what  is  known  as  the  'Inspector's  Contract,'  this  company  used 
a  printed  'estimate'  indicating  that  a  20-payment  life  policy  for  $5,000.00, 
age  35,  annual  premium  $189.85,  when  sold  with  an  'Inspectors'  Contract,' 
would  on  the  tenth  year  cost  the  holder  only  $3.89  and  on  the  eleventh  year  the 
dividends  on  the  contract  would  not  only  pay  all  of  his  premiums,  but  he 
would  receive  in  cash  a  check  for  $30.0(>,  such  annual  cash  payments  to  him 
increasing  gradually  until  in  the  twentieth  year  he  would  receive  $289.13  cash. 
Similar  estimates  were  used  in  the  sale  of  the  other  series  of  contracts.  How 


89 

such  results  would  be  possible  when  all  policy  holders  own  similar  contracts 
this  committee  cannot  understand,  since  the  only  source  of  revenue  is  from 
the  payment  of  premiums  by  holders  of  special  contracts." 

These  contracts  are  as  clear  offers  of  "something  for  nothing" 
as  were  ever  made.  If  the  estimates  cannot  be  matured  by  the 
company  then  every  person  who  has  purchased  a  special  contract 
has  been  deceived.  If  the  estimates  can  be  matured  every  dollar 
of  money  paid  upon  the  contracts  in  the  way  of  dividends  will  be 
an  extravagant  waste  of  the  company's  funds  and  an  annual  drain 
upon  its  resources  for  which  no  consideration  whatever  will  be  re- 
ceived. The  proposition  is  a  fraud  upon  somebody  in  either  case. 

Rebates  and  excessive  commissions  have  long  been  and  still  are 
a  source  of  great  expense  to  most  Indiana  companies  and  will  con- 
tinue to  be  until  inhibited  by  law. 

A  new  and  fruitful  field  of  extravagance  and  fraud  has  recently 
been  discovered  and  exploited  by  the  managers  of  a  number  of  do- 
mestic life  insurance  companies.  This  has  been  done  and  is  still 
being  done  through  the  guise  of  corporations  known  as  "agency 
companies."  These  companies  are  used  as  "go-betweens"  in  the 
transaction  of  the  company's  business  with  its  soliciting  agents. 
Every  moral  and  prudential  reason  requires  that  the  insurance  com- 
pany should  retain  direct  control  of  its  own  agents.  There  should 
be  direct  responsibility  of  the  agency  force  to  the  insurance  com- 
pany itself,  and  the  company  should  be  in  a  position  to  exercise  the 
closest  supervision  over  the  work  of  its  agents.  These  companies 
have  all  been  organized  for  the  purpose  of  taking  over  contracts 
afterwards  made  to  them  by  the  insurance  companies  for  the  ex- 
clusive right  to  solicit  insurance.  The  agency  force  then  becomes 
responsible  to  the  agency  company  alone.  It  is  made  the  particu- 
lar business  of  the  agency  company  to  take  over  all  of  the  under- 
writing for  a  certain  territory  and  in  this  way  relieve  the  officers  of 
the  insurance  company  from  the  work  of  getting  business.  The 
contracts  they  have  obtained  from  the  companies  have  provided 
for  extravagant  commissions  and  bonuses,  and  some  of  them  have 
been  so  liberal  in  character  that  they  have  been  sold  and  resold  at 
an  advance  of  hundreds  of  thousands  of  dollars. 

The  officers  of  the  insurance  companies  have  been  responsible 
without  exception,  either  directly  or  indirectly,  for  the  incorpora- 
tion of  every  such  company. 

The  pioneer  of  these  companies  in  Indiana  was  the  State 
Agency  Company,  organized  by  the  officers  of  the  State  Life  In- 
surance Company.  At  the  time  this  company  was  organized  it  was 


90 

given  a  contract  for  the  exclusive  agency  for  the  States  of  Indiana 
and  Illinois  and  such  other  territory  as  might  be  agreed  upon  from 
time  to  time.  It  provided  for  the  payment  of  commissions  of  from 
25  per  cent,  of  the  first  premium  paid  on  ten-year  endowment  an- 
nual dividend  policies  up  to  80  per  cent,  of  the  first  premium  on 
continuous  premium  life  policies  with  ten,  fifteen  or  twenty-year 
distribution  periods.  It  also  provided  for  the  payment  of  7Vi> 
per  cent,  of  all  second  year  and  subsequent  renewal  premiums  col- 
lected by  the  agency  company  on  the  insurance  written  by  such 
company  and  for  a  like  per  cent,  on  all  renewal  premiums  on  the 
business  then  in  force  in  the  territory  covered  by  the  contract.  The 
contract  also  contained  the  remarkable  stipulation  for  the  pay- 
ment by  the  agency  company  of  $1,000,000  in  installments  run- 
ning for  fifteen  years  to  the  State  Life  Insurance  Company  as  a 
consideration  for  the  contract.  The  authorized  capital  of  this 
company  was  $2,000,000.  The  sole  and  exclusive  business  of  the 
company  was  to  sell  life  insurance.  Beyond  the  funds  necessary  to 
furnish  its  office  and  organize  its  agency  force,  it  had  no  need  of 
assets,  yet  the  officers  and  solicitors  of  the  company,  supported  and 
abetted  by  the  officers  and  directors  of  the  State  Life  Insurance 
Company,  sold  to  the  people  of  Indiana  capital  stock  of  the  face 
value  of  $359,550.00  at  a  premium  of  $249,540.00,  or  an  aggre- 
gate of  $609,090.00.  One  O.  L.  Van  Laningham  was  one  of  the 
directors  of  the  company  and  its  first  president.  Mr.  Van  Lan- 
ingham had  been  for  years  identified  with  the  agency  department 
of  the  State  Life  Insurance  Company.  Samuel  Quinn,  vice-presi- 
dent and  superintendent  of  agents  of  the  State  Life  Insurance 
Company,  at  the  time  receiving  a  salary  of  $16,000.00  a  year 
from  said  company,  and  Charles  F.  Coffin,  director  and  general 
counsel  of  the  State  Life  Insurance  Company,  at  the  time  in  re- 
ceipt of  a  salary  of  $16,000.00  from  said  company,  and  Andrew 
M.  Sweeney,  president  of  the  State  Life  Insurance  Company,  at 
the  time  in  receipt  of  a  like  salary,  were  active  in  the  promotion 
of  the  company  and  in  recommending  its  stock  as  a  profitable  in- 
vestment. These  gentlemen  seemed  to  be  absolutely  oblivious  of 
the  fact  that  as  such  officers  of  the  State  Life  Insurance  Company 
they  stood  in  the  relation  of  trustees  of  its  policy  holders  and  that 
it  was  their  highest  duty  to  conserve  the  interests  of  such  policy 
holders.  The  contract  to  pay  the  agency  company  7%  per  cent, 
for  the  collection  of  renewal  premiums  on  business  written  prior 
to  the  incorporation  of  the  company  and  the  execution  of  the  con- 
tract was  a  fraud  upon  every  policy  holder  within  the  territory 


91 

named  in  the  contract  at  the  time  it  was  executed.  It  was  repre- 
sented by  the  solicitors  for  State  Agency  stock  and  by  printed 
literature  circulated  by  them,  that  the  renewal  commissions  on  ex- 
isting Indiana  and  Illinois  business  would  amount  to  over  $28,- 
000.00  a  year  to  the  Agency  Company.  How  officers  standing  in 
fiduciary  relation  to  the  policy  holders  of  the  State  Life  Insurance 
Company,  whose  rights  were  so  materially  and  adversely  affected 
by  this  contract,  could  have  executed  it  in  behalf  of  the  company 
if  they  believed  the  statements  they  made  as  to  the  extraordinary 
perspective 'profits  of  the  agency  company,  is  beyond  explanation 
upon  any  honest  theory. 

As  an  evidence  of  the  part  taken  and  the  activity  displayed  by 
the  President  of  the  State  Life  Insurance  Company  in  the  promo- 
tion of  the  State  Agency  Company,  and  in  the  sale  of  its  stock,  I 
submit  the  following  extract  from  a  letter  written  by  him  to  a 
friend  under  date  of  May  2,  1906: 

"The  State  Life  is  putting  upon  the  market  the  best  financial  investment 
it  has  ever  offered  in  this  State.  My  brother  and  son  are  going  to  Covington 
to  present  the  matter  to  my  friends  there,  and  I  could  not  afford  to  let  so 
good  a  thing  pass  around  without  giving  you  a  chance  at  it.  The  stock  has 
been  grabbed  up  here  very  rapidly  and  we  could  sell  the  whole  $3,000,000 
here,  but  I  insist  that  some  should  be  sold  in  each  county  seat." 

Also  the  following  extract  from  a  letter  to  the  same  friend, 
dated  May  5,  1906: 

"A  friend  of  mine  in  town  yesterday  took  sixty  at  $50.00  a  share.  The 
President  of  the  Agency  Company  notified  his  men  yesterday  that  stock 
would  be  selling  on  May  10th  for  $60.00,  so,  in  ten  days,  .your  $500.00  will  be 
worth  $600.00.  I  think  it  will  go  to  $100.00  before  the  summer." 

In  this  connection  it  is  important  to  remember  that  the  State 
Agency  Company  possessed  no  asset  other  than  agency  contracts 
with  the  State  Life  Insurance  Company.  If  these  contracts  were 
so  liberal  in  character  and  so  certain  in  profit  to  the  State  Agency 
Company  as  to  make  its  stock  the  best  financial  investment  ever 
offered,  what  became  of  the  fiduciary  relation  of  Mr.  Sweeney  as  a 
director  and  the  president  of  the  State  Life  Insurance  Company, 
is  a  question  which,  in  my  judgment,  has  but  one  answer,  and  that 
answer  is  that  the  relation  had  been  abused  and  betrayed. 

Not  content  with  the  contract  already  referred  to,  the  officers 
of  the  State  Life  Insurance  Company,  on  the  19th  day  of  May, 
1906,  entered  into  a  contract  with  the  said  O.  L.  Van  Laningham, 
then  President  of  the  State  Agency  Company,  for  the  territory  of 
Kansas,  Nebraska,  Texas,  Oklahoma  and  Indian  Territory,  upon 


92 

terms  of  such  liberal  and  extravagant  character  as  to  permit  Van 
Laningham  to  agree  to  pay  the  State  Life  Insurance  Company,  as 
a  consideration  therefor,  $250,000.00  at  stipulated  dates  in  the  fu- 
ture. On  the  6th  day  of  June  next  thereafter,  and  within  sixteen 
days  from  the  time  of  receiving  this  contract,  Van  Laningham  re- 
signed from  the  presidency  and  directorship  of  the  State  Agency 
Company.  On  the  9th  day  of.  June  Van  Laningham  assigned  the 
contract  to  the  State  Agency  Company  for  a  consideration  of 
$250,000,  $150,000  of  which  was  paid  in  cash,  and  the  balance 
of  which  was  to  be  paid  in  thirty  and  sixty  days  from  date.  Drafts 
for  the  sum  of  $150,000,  payable  to  the  order  of  the  State  Agency 
Company,  were  endorsed  and  delivered  to  Mr.  Van  Laningham,  wrho 
immediately  left  the  State.  It  is  important  to  note  that  the  payment 
of  the  drafts  was  stopped  only  by  injunction  proceedings  in  the 
Marion  Superior  Court.  It  is  also  important  to  note  that  the  officers 
of  the  State  Life  Insurance  Company  hereinbefore  named,  still  re- 
ceiving a  salary  from  said  company  of  $16,000  a  year,  each,  pro- 
moted, sanctioned  and  encouraged  these  transactions.  How  they 
could  give  their  assent  to  the  execution  of  a  contract  in  behalf  of 
the  State  Life  Insurance  Company  so  liberal  and  extravagant  in 
character  as  to  enable  the  man  to  whom  it  was  issued  to  sell  it 
within  less  than  twenty  days  at  an  advance  of  $250,000  and  rec- 
oncile their  act  with  the  position  they  held  as  trustees  for  the 
policy  holders  of  the  State  Life  Insurance  Company,  is  beyond  the 
comprehension  of  any  honest  man.  Subsequent  to  these  transac- 
tions a  receiver  was  placed  in  charge  of  the  State  Agency  Com- 
pany by  the  order  of  the  Superior  Court  of  Marion  County,  and 
the  contracts  held  by  the  State  Agency  Company  have  been  sold 
under  the  order  of  that  court.  They  were  purchased  by  Van  Lan- 
ingham, who  gave  his  notes  for  deferred  payments  aggregating 
$160,000.  These  notes  were  endorsed  by  the  five  directors  of  the 
State  Life  Insurance  Company  as  individuals.  That  the  situation 
contains  rare  possibilities  for  dishonest  or  negligent  officers  is  too 
clear  for  debate.  It  is  well  stated  in  the  committee's  report : 

"They  are  the  directors  of  the  company  with  which  Mr.  Van  Laningham 
and  his  agency  companies  do  all  their  business.  The  continuance  of  this  re- 
lation is  an  intolerable  one  which  should  be  scrutinized  and  watched,  not  only 
by  the  policy  holders  but  by  the  department.  Both  the  policy  holders  and 
the  department  should  take  all  possible  precautions  to  require  that  the  legiti- 
mate profits  in  the  underwriting  of  the  business  of  the  State  Life  Insurance 
Company  should  be  protected  and  conserved  to  the  policy  holders  by  the  of- 
ficers whose  sworn  duty  it  is  to  act  with  an  eye  single  to  the  interests  of  the 
policy  holders.  *  *  *  The  legislature  should  confer  upon  the  insurance  de- 


93 

partment  the  power,  upon  a  showing  of  such  reckless  manipulation  as  char- 
acterized the  State  Agency  scandal,  to  secure  the  appointment  of  a  temporary 
receiver  of  the  Life  Insurance  Company  until  the  company  could  be  reorgan- 
ized in  the  interests  of  its  policy  holders.  The  officers  primarily  to  blame  for 
such  diversion  in  the  company's  business  should  be  deprived  of  their  offices 
and  should  be  replaced  by  men  of  honest  intentions  and  good  business  judg- 
ment." 

The  State  Agency  Company  manipulations  and  the  contracts 
it  holds  are  but  examples  of  the  possibilities  of  the  Agency  Com- 
pany system.  Some  of  the  contracts  of  these  companies  give  the 
companies  a  commission  as  high  as  11  per  cent,  on  all  renewal  pre- 
miums paid  upon  business  written  by  them.  The  extravagance  of 
this  provision  is  apparent  when  we  remember  that  many  companies 
collect  their  renewal  premiums  in  Indiana  at  a  cost  not  exceeding 
1*4  per  cent. 

Preliminary  term  insurance  is  insurance  for  the  term  of  one 
year.  It  is  a  contract  which  ends  with  the  year  and  in  which  there 
is  no  element  of  investment  either  provided  by  the  policy  holder  or 
required  of  the  company.  The  purpose  of  preliminary  term  in- 
surance is  to  permit  the  company  to  use  a  greater  portion  of  the 
premium  for  expense  than  would  be  possible  if  the  companies  were 
charged  a  full  valuation  upon  the  policies.  The  theory  of  a  pre- 
liminary term  is  that  the  insurance  shall  be  for  a  preliminary 
term  of  one  year,  and  that  at  the  end  of  the  year  it  shall  be  con- 
sidered as  having  entered  upon  an  additional  term  of  a  fixed  num- 
ber of  years  or  as  having  become  a  whole  life  policy.  Up  to  the 
present  time  all  Indiana  companies  have  operated  according  to  the 
preliminary  term  plan.  No  matter  how  considerable  a  percentage 
of  the  amount,  the  annual  premium  charged  for  a  policy  may  be, 
or  how  considerable,  and  how  rapidly  increasing,  the  computed 
premium  reserve  of  the  policy  may  be,  the  first  premium  has  been 
stipulated  by  the  terms  of  the  contract  to  be  preliminary  or  term 
insurance,  creating  or  providing  for  no  reserve  at  the  end  of  that 
year,  and  confining  the  generation  of  such  reserve  as  the  other 
terms  of  the  policy  may  demand  exclusively  to  the  subsequent  years 
of  its  term.  This  supplies  a  very  large  portion  of  the  first  premium 
due  by  the  terms  of  any  policy  for  immediate  use  for  expenses ; 
and  has  helped  more  than  any  other  single  cause  to  make  the  com- 
panies lavish  or  extravagant  in  permitting  agency  expense.  It  is 
the  main  cause  of  the  high  record  of  percentage  of  management 
expenses  which  it  has  been  the  painful  duty  of  the  Executive  to  em- 
phasize in  this  message ;  percentages  which  are  fully  twice  those  of 


94 

the  more  economical  among  the  older  and  larger  American  com- 
panies, and  quite  three  times  the  percentages  of  the  British  life 
companies  generally.  The  plan  inevitably  leads  to  extravagant 
and  reckless  administration. 

This  conclusion  is  fully  warranted  by  a  comparison  of  the  ratio 
of  expense  to  income  incurred  by  companies  operating  under  pre- 
liminary term  valuation  with  that  of  the  companies  which  set  aside 
a  full  reserve  out  of  the  first  premiums.  This  comparison  discloses 
that  the  average  ratio  of  expense  to  income  for  five  years  ending 
January  1,  1906,  in  eight  preliminary  term  companies  has  been 
40.45  per  cent.,  while  the  average  ratio  of  expense  to  income  for 
the  same  five  years  of  eight  of  the  best  full  reserve  companies  has 
been  but  16.53  per  cent.,  a  difference  of  more  than  100  per  cent. 

It  is  evident  that  this  state  of  things  cannot  be  allowed  to  con- 
tinue. The  credit  of  the  State  and  of  the  companies  and  the  wel- 
fare of  the  thousands  of  policy  holders  preclude  that  it  should 
continue. 

I  have  given  this  matter  the  most  careful  study  and  have  made 
much  investigation  and  research  concerning  it.  I  have  sought  and 
obtained  at  no  inconsiderable  personal  expense  the  advice  and 
counsel  of  disinterested  experts  of  admitted  ability  and  integrity, 
and  I  am  thoroughly  convinced  that  the  preliminary  term  plan  is 
accountable  in  large  measure  for  the  waste  and  extravagance  that 
characterize  the  companies  operating  under  it. 

The  avowed  purpose  of  the  plan  is  to  require  each  new  appli- 
cant for  insurance  to  pay  out  of  his  first  premium  the  putative 
cost  of  inducing  him  to  become  a  policy  holder,  or  in  other  words 
to  pay  the  agent's  first  commission,  even  if  he  applies  directly  to 
the  office  for  his  insurance  and  no  agent  has  seen  or  introduced  him. 
But  even  more  is  expected  of  him  as  the  plan  is  actually  operated. 
It  is  expected  that  he  shall  contribute  toward  expenses  the  entire 
excess  of  his  first  premium  over  the  net  or  actual  cost  of  insuring 
him  for  that  year,  after  allowing  for  any  share  of  surplus,  if  any 
is  assigned  to  him,  for  that  year.  This  is  a  tax  which  is  crudely 
inversely  proportional  to  the  value  to  the  company,  technically 
known  as  the  "insurance  value"  of  the  policy  which  he  may  apply 
for;  and  from  another  point  of  view  makes  him  advance  money 
to  the  company  for  expense  purposes,  as  if  he  were  to  contribute 
so  much  to  a  guaranty  or  promotion  fund,  regardless  of  the  simple 
value  to  him  of  his  insurance  for  the  first  year,  and  without  war- 
rant for  the  ultimate  return  of  the  advance,  or  any  promise  of 
interest  for  affording  the  accommodation.  The  vice  of  the  plan 


95 

lies  in  the  excess  rate  charged  for  the  preliminary  term  and  the 
inducement  it  affords  to  extravagant  and  reckless  administration. 
Speaking  to  this  point  the  committee  aptly  says: 

"If  the  policy  holder  knows  that  his  first  premium  secures  him  preliminary 
term  insurance,  and  understands  what  preliminary  insurance  means,  and  that 
at  the  end  of  the  first  year  his  policy  is  valueless,  in  so  far  as  any  reserve 
remaining  to  his  credit,  and  if  said  policy  holder  pays  for  such  first  premium 
a  correct  amount,  the  contract  is  above  criticism  on  both  legal  and  equitable 
grounds.  If,  however?  the  policy  holder  is  charged  a  level  premium  from 
which,  if  he  were  treated  equitably,  a  full  reserve  should  be  set  aside  to  him, 
then  in  principle  such  preliminary  term  contracts  and  preliminary  valuation 
thereof  is  wrong,  and  we  believe  that  few  policy  holders  would  make  such 
contracts  knowingly.  In  other  words,  we  do  not  believe  that  a  preliminary 
term  contract  and  preliminary  term  valuation  is  wrong  if  the  policy  holder 
is  charged  an  appropriate  price  for  it.  If  he  is  charged  a  price  which  should 
secure  him  a  better  contract  and  better  valuation,  then  it  is  wrong  and  in- 
equitable. If  he  understands  what  he  is  getting  for  his  money,  then,  of  course, 
he  cannot  complain.  We  do  not  believe  that  the  general  public  understands  the 
real  import  of  the  preliminary  term  feature  for  which  level  premiums  are  paid. 

"It  must  be  remembered  that  insurance  for  a  term  of  one  year,  commonly 
denoted  a  preliminary  term,  is  a  contract  which  ends  with  the  year,  and  in 
which  there  has  been  no  element  of  investment  either  provided  by  the  policy 
holder  or  required  of  the  company.  Sufficient  reserve  must  be  set  aside  at  the 
beginning  of  the  year  which,  with  the  mortality  charge  collected  in  the  pre- 
mium, will  mature  the  policy  to  the  end  of  the  year.  This  reserve  gradually 
decreases  until  the  end  of  the  year,  when  no  reserve  remains.  *  *  * 
If  the  policy  holder  pays  no  more  than  a  fair  proportion  of  the  expense  for 
the  first  year,  his  premium  should  be  very  much  lower  for  the  one-year  pre- 
liminary term  than  the  level  premium  which  he  pays  for  the  20-payment 
whole  life  policy.  If  he  pays  a  level  premium  he  is  paying  an  amount  which 
entitles  him,  if  equitably  applied,  to  a  reserve  to  his  credit  very  much  larger 
than  the  small  reserve  set  aside  to  him  in  the  preliminary  term  valuation. 

"From  the  standpoint  of  the  permanent  welfare  of  the  insurance  company, 
we  are  convinced  that  the  preliminary  term  feature  is  not  scientific,  and  is  of 
no  possible  advantage  to  the  company,  except  that  if  it  can  induce  policy 
holders  to  pay  a  level  premium,  the  amount  which  may  be  used  for  expense 
is  greatly  increased.  *  *  * 

"An  examination  of  the  percentages  of  first  premium  allowed  to  agents, 
as  shown  by  the  agency  company  contracts  executed  by  several  of  the  com- 
panies, indicate  that  there  are  very  much  larger  profits  to  the  agency  com- 
panies than  good  faith  on  the  part  of  the  management  of  the  insurance  com- 
panies would  permit.  In  other  words,  the  management  has  been  too  expensive 
and  the  commissions  have  been  too  high.  The  large  commissions  paid  on  the 
first  premiums,  and  the  large  renewal  commissions  provided  in  some  of  the 
agency  contracts  of  these  companies,  make  it  impossible  for  the  companies 
to  live  without  impairing  the  net  premiums  based  upon  full  valuation." 

Another  evil  that  has  developed  with  the  growth  of  life  insur- 
ance is  the  accumulation  and  hoarding  of  unecessary  and  useless 


96 

funds  denominated  "surplus."  The  term  means  the  amount  held 
by  the  company  over  and  at)ove  that  which  is  necessary  to  mature 
all  its  contracts  and  to  pay  all  its  liabilities.  The  Equitable  Life 
Insurance  Company  of  New  York  has  a  fund  of  this  character  ex- 
ceeding $61,000,000,  and  the  New  York  Life  Insurance  Company 
a  similar  fund  of  more  than  $52,000,000.  According  to  the  sworn 
report  of  one  of  the  Indiana  companies  it  has  accumulated  a  sur- 
plus in  eleven  years  of  $605,316.69,  notwithstanding  the  illegiti- 
mate drain  of  discriminating  dividends  paid  to  the  policy  holders 
of  special  contracts  in  that  time  aggregating  more  than  $605,- 
000.00.  These  great  funds  have  been  accumulated  notwithstand- 
ing the  extravagance  and  misuse  which  has  characterized  the  ad- 
ministration of  the  affairs  of  these  companies.  The  only  legiti- 
mate purpose  such  a  fund  can  serve  is  to  meet  any  deficiency  which 
may  arise  under  extraordinary  circumstances  in  the  other  funds 
of  the  company.  While  every  dollar  of  it  has  been  contributed  by 
policy  holders,  all  claim  upon  it  is  forfeited  whenever  they  cease 
to  be  policy  holders.  A  great  surplus  is  a  standing  temptation  to 
those  who  are  charged  with  its  management,  to  extravagant,  specu- 
lative and  corrupt  transactions  concerning  it.  It  should  be  dis- 
tributed annually  to  the  people  to  whom  it  belongs — the  policy 
holders  from  whose  contributions  it  has  arisen. 

The  investigation  made  by  the  committee  led  it  to  the  conclu- 
sion that  the  rates  charged  for  insurance  arc  excessive.  The  in- 
vestigation made  by  the  Executive  has  led  him  to  a  like  conclusion, 
and  I  believe  the  facts  when  known  and  considered,  will  inevitably 
lead  any  fair  minded  man  to  the  same  conclusion.  The  rates  are  so 
high  that  extortionate  salaries  can  be  paid,  rebates  and  excessive 
commissions  allowed,  discriminative  dividends  under  special  con- 
tracts paid,  misappropriation  of  funds  committed,  and  the  com- 
panies remain  solvent  and  at  the  same  time  accumulate  large  sur- 
plus funds. 

It  is  your  solemn  duty  to  so  legislate  as  to  put  an  end  to  mal- 
administration of  domestic  life  insurance  companies.  You  should 
enact  a  law  which  will  limit  the  salaries  of  every  executive  officer 
or  director  of  any  company.  The  business  of  no  Indiana  company 
is  such  as  to  justify  the  payment  of  a  salary  of  more  than  $10,- 
000.00  to  any  executive  officer.  Limitation  should  be  placed  upon 
the  power  of  boards  of  directors  to  vote  salaries.  Publicity  should 
be  required  by  the  filing  on  the  first  day  of  each  year  a  sworn 
statement  of  the  salaries  and  compensation  paid  to  all  such  officers, 
with  the  insurance  commissioner.  Every  such  salary  list  should 


97 

have  the  approval  of  the  insurance  commissioner  before  it  becomes 
"»  effective. 

There  should  also  be  legislation  inhibiting  any  company  or  the 
agent  thereof  from  paying,  allowing  or  offering  as  an  inducement 
to  any  person  to  take  insurance,  any  rebate  or  premium  or  any 
special  favor  or  advantage  whatever  in  the  dividends  to  accrue 
thereon,  or  any  inducement  whatever  not  specified  in  the  policy. 

Special  contracts  should  also  be  inhibited.  I  can  not  do  better 
than  to  commend  to  your  consideration  the  recommendation  of  the 
committee  in  this  behalf: 

"We  recommend  that  a  statute  be  enacted  prohibiting  life  insurance 
companies  doing  business  in  this  State  from  making  any  discrimination  in 
favor  of  individuals  of  the  same  class,  either  in  the  amount  of  premium 
charged,  or  in  any  return  of  premium,  dividends,  special  contracts,  predated 
policies,  or  any  other  advantages. 

"The  statute  should  further  prohibit  the  companies  from  paying  dividends 
upon  any  existing  special  contracts,  excepting  in  cases  where  the  services 
performed  under  said  special  contracts  are  so  vouchered  to  the  company  as 
to  show  the  specific  service  and  the  amount  of  compensation  therefor;  and 
the  statute  should  prohibit  any  credit  or  payment  being  made  by  the  company 
to  any  present  or  future  policy  holder,  on  account  of  dividends,  commissions, 
or  other  provision  of  said  special  contracts,  unless  the  amounts  are  so 
vouchered.  And  the  insurance  department  of  the  State  should  annually 
scrutinize  the  accounts  of  the  companies  and  make  thorough  examination  of 
their  vouchers,  so  as  to  compel  obedience  to  such  provisions  of  the  statute, 
and  to  put  an  end  to  such  discrimination. 

"The  companies  should  be  required  to  file  with  their  annual  statements 
made  to  the  department,  a  schedule  showing  the  amount  paid  to  each  policy 
holder  under  existing  special  contracts,  if  any,  and  for  what  service  the 
same  was  paid." 

The  gain  and  loss  statements  of  the  various  companies  of  the 
country  disclose  that  a  company  will  as  an  average  earn  or  accu- 
mulate surplus  amounting  to  about  2%  per  cent,  of  its  entire  as- 
sets in  the  course  of  a  year.  No  considerable  sum  of  unapportioned 
surplus  in  addition  to  the  amount  of  the  computed  provision  for 
policy  liabilities,  together  with  the  amount  of  outstanding  death 
claims,  and  other  liabilities,  needs  to  be  held.  For  these  reasons  it 
is  sufficient  to  permit  companies  to  accumulate  and  hold  an  unap- 
portioned surplus  fund  of  5  per  cent.,  or  two  full  years'  accumu- 
lation. I  therefore  unqualifiedly  recommend  the  suggestion  of  the 
committee  that 

"The  statute  should  provide  that  in  the  case  of  every  policy  issued  on 
or  after  January  1,  1908,  the  proportion  of  the  surplus  accruing  upon  each 
policy  shall  be  annually  ascertained  and  annually  distributed,  and  not  other- 

[7—19891] 


98 

wise.  Said  annual  dividends  should  be  either  paid  in  cash,  or  credited  to  the 
policy  holder,  as  a  fixed  liability  from  the  company  to  him,  and  no  annual  dis- 
tribution of  surplus  should  be  treated  as  contingent  liability  on  said  policy. 

"The  statute  should  further  provide  that  in  case  of  all  deferred  dividend 
policies  written  before  January  1,  1908,  the  company  should  annually  appor- 
tion the  surplus  accruing  to  said  policies,  and  make  annual  report  of  the 
same  to  the  department. 

"The  annual  distribution  to  participating  insurance  should  exhaust  the 
surplus  to  5  per  cent,  of  the  assets,  leaving,  however,  5  per  cent,  surplus, 
exclusive  of  guaranty  funds,  capital  stock  and  any  excess  of  market  values 
over  book  values  of  securities  owned  by  the  companies. 

"The  statute  should  provide  that  where  mutual  companies  engage  in  writ- 
ing participating  insurance,  such  companies  should  cease  to  write  non-partici- 
pating insurance,  but  that  all  insurance  written  after  January  1,  1908,  should 
share  in  the  surplus  in  its  due  proportion  and  without  discrimination. 

"In  case  of  stock  companies  the  law  should  provide  that  in  addition  to 
said  5  per  cent,  of  surplus  remaining,  the  directors  may  set  aside  sufficient 
surplus  to  pay  a  dividend  not  exceeding  10  per  cent,  on  capital  stock,  before 
apportioning  surplus  to  the  policies,  after  which  all  available  surplus  over 
the  5  per  cent,  above  stated,  shall  be  apportioned  to  policies." 

I  also  recommend  that  the  law  be  so  amended  as  to  require  the 
management  of  every  company  to  be  strictly  confined  to  the  com- 
pany officers,  acting  solely  in  their  capacity  as  company  offi- 
cers without  the  use  or  intervention  of  any  allied  or  sub- 
sidiary companies,  and  that  the  companies  shall  be  required  to  deal 
directly  with  their  agency  force,  without  the  intervention  of  agency 
companies.  All  such  "go-betweens"  as  the  present  agency  com- 
panies should  be  inhibited. 

The  following  provisions  relative  to  preliminary  term  valuations 
should  also  be  enacted : 

"On  and  after  January  1,  1908,  the  premium  for  all  policies  issued  by 
companies  organized  and  doing  business  under  this  act  must  be  so  computed 
as  to  provide  for  insurance  expense  in  equal  proportion  to  the  yearly  net 
or  death  costs  of  insurance  thereunder,  except  that  when  any  such  policy  stipu- 
lates that  insurance  for  the  first  year  thereunder  shall  be  term  or  pure  insur- 
ance, an  extra  allowance  for  expense  may  be  made  for  that  year,  which  shall  be 
proportional  to  all  the  future  yearly  costs  of  insurance,  including  provision 
for  insurance  expense,  which  may  accrue  under  the  terms  of  the  said  policy." 

It  is  well  proved  that  even  with  a  very  few  millions  in  amount 
of  policies  of  insurance  outstanding  and  conservative  premiums,  a 
fairly  good  basis  or  average  is  secured,  the  law  of  mortality  being 
so  regular  in  its  operation ;  and  if  contented  with  a  moderate  rate 
of  growth,  the  larger  Indiana  companies  will  have  no  possible  oc- 
casion for  dependence  on  the  preliminary  term,  and  with  a  suitable 
guarantee  fund  covering  necessary  advance  expenses,  no  newly  or- 


99 

ganized  and  small  company  will  have  any  occasion  to  depend  on 
such  a  plan.  But  for  the  fact  that  many  of  the  advocates  of  the 
preliminary  term  plan  appear  to  conscientiously  believe  it  is  the 
only  equitable  method  of  life  insurance  operation,  I  would  recom- 
mend the  inhibition  of  the  plan  altogether.  In  view  of  the  situa- 
tion, however,  I  concur  in  the  recommendation  of  the  committee  that 
legislation  shall  be  had  which  will  insure  placing  the  plan  on  a  cor- 
rect and  equitable  basis,  to  the  end  that  applicants  for  policies  em- 
bracing this  feature  shall  not  be  misled  as  to  the  nature  of  the 
bargain  into  which  they  enter. 

There  is  yet  one  other  matter  in  connection  with  the  subject  of 
life  insurance  which  is  entitled  to  your  consideration.  Among  the 
assets  of  the  companies  are  an  excessive  number  of  loans  secured  by 
assignment  of  policies.  These  are  known  as  policy  loans.  They 
are  not,  however,  bona  fide  loans,  as  they  do  not  represent  cash 
transactions.  They  arose  out  of  a  practice  of  dating  back  policies 
five  to  seven  years  and  taking  notes  for  amounts  computed  to  be 
the  value  of  the  reserve  upon  the  policies  issued.  Of  the  gross  as-, 
sets  of  one  of  these  companies  41  per  cent,  are  of  this  class  of  se- 
curities. In  another  instance  50  per  cent,  of  the  company's  assets 
are  of  similar  character;  in  another  64  2-3  per  cent.,  another  72.5 
per  cent.,  and  another  76.4  per  cent. 

The  practice  of  the  companies  in  this  respect  is  well  told  in 
the  committee's  report: 

"These  obligations  have  taken  different  forms.  In  one  of  its  most  com- 
plex forms  the  policy  is  predated  five  or  seven  years,  more  often  seven  years, 
or  if  not  actually  predated,  it  is  stated  that  it  shall  be  treated  as  if  it  had  been 
executed  seven  years  prior  to  its  actual  execution.  In  other  words,  if  the 
applicant  is  twenty-eight  years  of  age,  he  is  stated  in  the  policy  to  be  insured 
as  of  the  age  of  twenty-one.  He  gives  the  company  a  note  for  an  amount 
which  is  computed  to  be  the  value  of  a  reserve  upon  a  policy  seven  years  of 
age.  The  eighth  premium  he  is  required  prima  facie  to  pay  in  cash,  and  it 
is  stated  to  him  that  he  is  in  the  same  situation  as  his  neighbor  of  the  same 
age  who  secured  a  similar  policy  seven  years  prior.  The  advantages  held  out 
to  him  are  in  short  that  he  has  escaped  all  expense  of  the  company  on 
account  of  mortality,  operating  expense,  cost  of  writing  business,  etc.,  for 
seven  years,  and  that  he  is  paying  for  those  seven  years  only  the  amount  of 
the  legal  reserve.  This  amount  he  has  not  paid  in  cash  but  has  paid  with  a 
note  which  is  stated  to  be  a  lien  upon  the  policy  "issued  to  him.  The  note 
ordinarily  provides  for  the  payment  of  interest  at  5  per  cent,  per  annum, 
which  in  most  cases  is  annually  to  be  added  to  the  principal  of  the  note, 
thus  compounding  it.  Instead  of  paying  twenty  full  premiums  on  a  twenty- 
payment  policy,  he  pays  but  thirteen  full  premiums,  his  first  seven  premiums 
being  paid  only  to  the  extent  of  the  reserve,  and  that  portion  being  paid  not 
in  cash  but  by  a  note  which  fee  is  led  to  believe  is  very  likely  to  be  paid  by 


100 

the  accumulations  which,  during  thirteen  years,  shall  accrue  to  his  policy. 
In  a  number  of  cases  it  is  provided  that  in  case  he  dies  within  thirteen  years, 
the  note  shall  be  cancelled  and  not  collected.  In  all  cases  it  is  provided  that 
at  the  time  of  settlement  other  than  by  death,  the  amount  of  the  policy  loan 
shall  be  deducted  from  the  sum  due  him  or  his  beneficiary  at  settlement.  *  *  *. 
"In  making  their  annual  statements  to  the  Auditor,  the  companies  have 
stated  their  first  premiums  in  gross  without  indicating  what  amount  was 
paid  in  cash  and  what  by  premium  notes  or  policy  loans.  They  have  given 
the  amount  of  renewal  premiums  in  the  same  general  terms,  and  the  annual 
statements  published  and  distributed  to  their  policy  holders  have  failed  to 
distinguish  between  actual  valuable  assets  and  assets  which  consisted  of  credits 
only.  For  instance,  a  company  which  has  .$2,000,000  of  actual  commercial 
assets  of  the  cash  value  of  $2,000,000  is  in  a  very  different  situation  from 
a  company  which  shows  $2,000,000  of  assets  of  which  only  $500,000  represents 
valuable  commercial  assets,  and  the  remaining  $1,500,000  represents  set-offs 
against  liability  carried  by  the  company.  The  set-off  should  be  balanced 
against  its  corresponding  amount  of  liability,  and  the  statement  of  these 
companies  should  be  revised  so  as  to  show  their  actual  business.  The  items 
as  represented  in  the  annual  statement  to  the  Auditor  should,  at  all  times, 
be  so  separated  as  to  indicate  to  the  Auditor  and  to  the  public,  who  have 
the  privilege  of  examining  such  statements,  the  exact  amount  of  actual  cash 
business  and  the  amount  which  consists  purely  of  credits  done  by  the  company 
during  the  year." 

The  vice  of  the  practice  of  making  policy  loans  for  commuted 
premiums  in  case  of  predated  contracts  lies  largely  in  the  varied 
and  numerous  species  of  deception  to  which  it  is  susceptible  and  the 
opportunity  it  affords  to  disguise  the  ratio  of  the  operating  expense 
of  the  company  to  the  actual  income,  and  in  the  fact  that  this  class 
of  business  is  not  persistent.  In  time  of  financial  stringency  or 
popular  agitation  over  insurance  questions,  the  policy  holder  does 
not  have  the  same  attachment  for  a  policy  for  which  he  has  given 
his  premium  note  which  becomes  void  upon  lapse  of  the  policy, 
without  personal  liability  against  him,  that  he  has  for  a  policy  upon 
which  he  has  paid  a  similar  amount  in  hard-earned  cash.  I  quite 
agree  with  the  conclusion  of  the  committee : 

"There  is  no  doubt  that  bona  fide  policy  loans  representing  cash  trans- 
actions, if  kept  within  the  actual  accumulations  to  the  credit  of  the  policy, 
are  a  perfectly  legitimate,  safe  and  profitable  investment  for  the  company. 
We  believe,  however,  that  policy  loans  written  in  such  large  quantities  as  are 
now  possessed  by  a  number  of  Indiana  companies  are  a  source  of  danger 
and  embarrassment  to  the  company,  and  a  means,  whether  used  or  not,  of 
deception  and  fraud  upon  the  part  of  unscrupulous  representatives  of  the 
company." 

The  statute  should  be  amended  so  as  to  provide  that  the  amount 
invested  in  loans  upon  policies,  together  with  accrued  interest 


thereon,  shall  not  at  any  time  exceed  the  reserve  against  said  policy, 
and  that  no  company  shall  in  any  year  invest  in  policy  loans  an 
amount  in  excess  of  20  per  cent,  of  its  actual  cash  income  for  that 
year.  But  for  the  large  percentages  of  the  assets  of  Indiana  com- 
panies already  invested  in  such  loans,  I  would  recommend  legisla- 
tion limiting  the  amount  of  policy  loans  to  certain  percentages  of 
the  gross  assets  of  the  companies. 

The  management  of  some  of  the  Indiana  companies  has  been  of 
such  a  character  and  the  companies  have  become  so  far  removed 
from  the  control  of  the  policy  holders  that  an  act  should  be  passed 
cancelling  all  proxies  executed  prior  to  its  passage,  and  providing 
for  the  restoration  of  the  companies  to  the  control  of  the  policy 
holders  through  the  election  of  entirely  new  boards  of  directors. 

Taken  all  in  all,  the  matter  of  remedial  insurance  legislation  is 
perhaps  the  most  important  subject  that  will  come  before  you  dur- 
ing your  deliberations.  It  deserves  painstaking  study,  thoughtful 
consideration  and  dispassionate  discussion.  You  have  in  the  time 
and  circumstances  of  the  present  legislative  session  a  rare  and  un- 
usual opportunity  to  save  Indiana  life  insurance  companies  from 
the  weaknesses  and  follies  of  those  who  manage  them.  You  can, 
if  you  will,  provide  opportunity  for  them  to  become  strong  and 
safe  and  great.  The  people  expect  this  legislation  at  your  hands. 
In  the  degree  you  fail  to  enact  it,  you  will  fail  in  the  perform- 
ance of  your  duty. 

TEMPERANCE    LEGISLATION. 

The  Sixty-fourth  General  Assembly  amended  the  law  relating  to 
the  licensing  and  sale  of  intoxicating  liquors  by  authorizing  the 
filing  of  a  remonstrance,  signed  by  the  majority  of  the  legal  voters 
of  a  township  or  ward,  against  the  retail  traffic  in  such  township  or 
ward,  and  making  a  successful  remonstrance  effective  for  two  years. 
This  amendment  has  been  sustained  by  the  Supreme  Court,  an$  is 
proving  a  most  effective  means  of  restricting  the  traffic. 

Since  its  enactment  189  townships  and  18  city  wards  have  ef- 
fectively used  its  provisions.  The  legalized  traffic  is  now  ex- 
cluded from  the  territory  within  such  townships  and  wards.  With- 
in this  territory  live  421,750  people.  By  affirmative  action  these 
people  have  driven  the  business  from  their  midst. 

The  right  of  a  free  people  to  exclude  from  their  communities  a 
traffic  whose  every  element  is  an  unmixed  evil,  is  fundamental.  It 
is  the  basic  principle  of  free  government.  That  right  these  people 
have  exercised,  and  their  decision  should  be  respected  by  all  men. 


*102 

But  the  liquor  traffic  brooks  no  restraint.  It  knows  no  law.  It 
recognizes  no  right,  however  fundamental  and  sacred.  In  Maine 
it  tramples  upon  the  provisions  of  the  Constitution  and  demands 
the  substitution  of  legislative  enactment.  In  Indiana  it  breaks  over 
every  legislative  enactment,  respecting  neither  hour,  holiday  nor 
Sabbath.  It  invades  townships  from  which  it  has  been  excluded  by 
,the  solemn  act  of  the  inhabitants  of  such  townships,  and  by  every 
trick  and  artifice  and  every  secret  and  corrupt  method  known  to 
craft  and  greed  seeks  to  impose  itself  upon  an  unwilling  people. 

That  the  will  of  the  people  lawfully  expressed  and  recorded 
may  be  maintained;  that  communities  from  which  the  traffic  has 
been  excluded  may  be  saved  from  invasion ;  that  public  sentiment 
against  the  business  may  not  be  broken  down,  and  that  education  of 
the  people  against  it  may  go  on,  it  is  important  that  illicit  sales  by 
unlicensed  venders  shall  cease  throughout  all  territory  covered  by 
successful  remonstrance. 

Under  existing  conditions  it  is  difficult  to  obtain  sufficient  proof 
to  convict  persons  selling  without  license  in  such  territory.  A  law 
against  all  such  sales,  carrying  severe  penalties,  making  it  an  of- 
fense to  run  or  operate  a  place  where  illicit  sales  of  intoxicants  are 
made,  providing  that  possession  of  intoxicating  liquors  by  one  un- 
licensed, or  the  finding  of  such  liquors  upon  his  premises,  or  the 
possession  of  a  receipt  showing  the  payment  of  the  United  States 
revenue  taxes  for  the  sale  of  intoxicating  liquors,  shall  constitute 
prima  facie  evidence  of  the  guilt  of  keeping,  running  and  operat- 
ing such  a  place,  with  an  effective  search  and  seizure  clause  author- 
izing search  for  and  confiscation  and  destruction  of  all  intoxicating 
liquors  found  in  or  upon  the  premises  where  such  a  place  is  kept, 
run  or  operated,  is  essential  to  the  peace  and  happiness  of  these 
communities. 

I  do  not  desire  that  it  shall  be  understood  that  I  am  opposed  to 
other  restrictive  measures,  because  I  have  recommended  this  legis- 
lation. Such  is  not  my  attitude.  The  business  is  so  utterly  in- 
defensible from  any  standpoint,  moral  or  economic,  that  I  am  pre- 
pared to  give  executive  approval  to  any  measure  looking  to  the 
further  regulation  or  restriction  of  the  traffic  which  I  believe  to  be 
a  valid  enactment. 

DEATH   PENALTY. 

The  law  in  Indiana  still  permits  the  infliction  of  the  death  pen- 
alty as  punishment  for  murder.  I  have  been  asked  twice  to  inter- 
vene in  cases  where  this  punishment  has  been  adjudged.  In  one 


103 

case,  as  already  indicated,  the  sentence  was  commuted  to  life  im- 
prisonment. The  evidence  was  wholly  circumstantial  and  the  pris- 
oner did  not  seem  to  have  had  the  defense  to  which  he  was  entitled. 
In  the  other  case  I  refused  to  interfere,  withheld  clemency  and 
permitted  the  decree  of  the  law  to  be  executed.  I  am  opposed  to 
capital  punishment  in  any  form.  Every  fiber  of  my  t>eing,  physical 
and  moral,  revolts  at  the  taking  of  human  life,  even  though  the 
deed  be  done  in  the  name  of  the  law  and  as  a  punishment  for  crime. 
I  did  not  interfere  in  the  case  named,  because  the  evidence  of  the 
prisoner's  guilt  was  clear  and  overwhelming.  The  details  of  the 
crime  were  substantially  admitted.  The  murder  was  premeditated 
and  brutal,  and  there  was  in  the  whole  case  no  palliating  fact  or  cir- 
cumstance. To  have  modified  the  decree  in  such  a  case  would  have 
been  to  have  suspended  the  law  itself,  and  to  have  substituted  my 
individual  conviction  for  the  solemn  judgment  of  the  people  as  ex- 
pressed through  legislative  enactment.  This  I  felt  I  had  no  legal 
right  to  do.  I  found  myself  bound  by  the  law.  Being  so  bound 
I  obeyed  its  mandate  and  staid  my  hand,  though  in  doing  so  I 
crucified  my  own  conviction  of  right.  The  law  requiring  such  pun- 
ishment does  violence  to  my  every  moral  sense,  and  I  can  not  stand 
acquit  at  the  bar  of  my  own  conscience  until  I  have  done  what  I 
can  to  put  an  end  to  the  practice  in  Indiana.  It  is  out  of  keeping 
with  the  spirit  of  the  age  in  which  we  live.  It  is  always  and  forever 
in  conflict  with  the  teachings  of  the  religion  in  which  Christian 
men  believe.  It  has  no  place  among  the  solemn  enactments  of  an 
enlightened  and  Christian  people.  It  has  but  one  defense  even  in 
the  minds  of  its  adherents,  that  of  public  necessity.  But  that  de- 
fense has  never  yet  been  adequately  made  out.  The  shedding  of  hu- 
man blood  does  not  deter  crime — it  begets  it.  The  brutality  of  such 
a  scene  leaves  every  man  who  looks  upon  it  the  worse,  for  having 
seen  it.  Even  the  men  who  have  provided  for  it  in  the  law  of  this 
State  confessed  as  much  when  they  required  it  to  be  done  in  secret 
behind  the  bolted  doors  of  the  State  Prison.  Society  can  be  pro- 
tected from  the  man  who  commits  murder,  by  life  imprisonment 
quite  as  effectually  as  by  taking  his  life.  Life  imprisonment  is 
adequate  punishment.  It  is  a  greater  deterrent  than  the  death 
penalty.  It  should  be  the  limit  of  human  law. 

I  have  given  this  matter  patient  study  and  much  research,  and 
have  been  unable  to  find  any  reliable  statistics  that  justify  the 
belief  that  legal  executions  make  the  crime  of  murder  less  frequent. 
There  is  not  a  State  in  the  Union  where  the  death  penalty  is  in- 
hibited which  does  not  have  fewer  homicides  than  most  of  the 


104 

States  whose  laws  impose  it.  This  is  especially  true  in  Michigan 
and  Maine,  where  there  have  been  no  legal  executions  for  many 
years.  In  the  Indiana  State  Prison  the  death  penalty  has  been  exe- 
cuted eleven  times  within  the  last  five  years.  It  has  been  imposed 
in  murder  cases  for  more  than  a  half  century,  yet  homicides  are 
more  frequent  here  than  in  either  of  the  States  named. 

As  I  read  this  message  four  men  await  execution  in  the  death 
cells  of  the  State  Prison.  The  days  of  execution  are  fixed,  Feb- 
ruary 8,  February  25  and  March  29.  You  have  power  to  prevent 
these  executions  by  repealing  the  law  that  compels  them,  and  au- 
thorizing the  Excutive  to  commute  the  death  sentence  to  life  im- 
prisonment. If  the  sentence  is  carried  out,  you  must  assume  the 
responsibility.  As  the  Executive  I  appeal  to  you  to  save  the  Execu- 
tive officers  of  the  prison  and  of  the  State  from  the  further  inflic- 
tion of  such  a  penalty.  If  you  fail  to  do  so  and  I  can  find  sub- 
stantial fact  or  circumstance  in  either  of  the  four  cases  upon  which 
to  predicate  executive  action,  I  shall  commute  the  sentence ;  and 
if  you  fail,  and  I  can  find  no  such  fact  or  circumstance,  I  shall 
find,  again,  God  helping  me,  somewhere  and  somehow,  the  resolu- 
tion to  stay  my  hand  and  permit  the  unholy  sentence  of  the  law 
to  be  done,  but  to  my  dying  day  I  shall  be  unable  to  acquit  the  law 
which  imposes  the  uncalled  for  burden  upon  me.  You  will  be  in 
session  here  February  8  and  February  25.  I  take  it  that  you  will 
not  forget  that  the  lives  of  four  men  may  depend  upon  your  action. 

LAW    ENFORCEMENT. 

The  last  two  years  have  witnessed  such  improvement  in  the 
civic  thought  of  the  State  as  to  mark  an  epoch  in  our  history. 
An  awakened  public  conscience  has  inspired  new  conceptions  of 
public  obligation  and  made  possible  better  enforcement  of  the  law 
throughout  the  State.  For  three  years  lawless  assemblages,  riots 
and  lynchings  have  been  unknown  in  Indiana.  Impressed  with  the 
belief  that  timely  action  in  such  cases  is  more  effective  than  punish- 
ment afterward,  I  have  sent  an  executive  representative  to  the 
scene  of  every  such  possible  breach  of  the  peace  whenever  I  have 
had  notice  of  occasion  for  so  doing.  In  several  instances  violence 
has  been  prevented  by  this  timely  intervention. 

Strict  enforcement  of  the  statutes  enacted  by  the  General  As- 
sembly should  bring  home  to  you  a  higher  appreciation  of  the  re- 
sponsibility involved  in  making  statutes.  It  is  well  that  you  under- 
stand that  the  laws  you  enact  will  be  enforced.  Indeed,  the  Execu- 
tive has  no  choice.  His  oath  is  to  enforce  all  the  laws  all  the  time, 


105 

and  the  obligation  of  the  citizen  is  to  obey  all  the  laws  all  the  time. 
Your  word  creates  the  law.  The  law  creates  the  obligation.  When 
you  have  spoken  and  the  obligation  is  imposed,  executive  action 
must  necessarily  follow. 

There  are  yet  those,  however,  who  look  upon  the  enforcement 
of  even  wholesome  and  beneficent  laws  as  an  abridgment  of  what 
they  are  pleased  to  call  personal  liberty*  There  are  yet  others 
who  insist  upon  the  right  to  decide  for  themselves  what  laws  are 
wise  and  wholesome  and  ought  to  be  obeyed  and  what  are  unwise 
and  arbitrary  and  ought  to  be  disregarded.  It  is  important  that 
this  false  view  of  public  duty  and  the  obligation  of  citizenship  be 
eliminated  from  the  public  mind. 

True  liberty,  of  necessity,  is  compelled  to  find  its  limitations 
in  the  law.  This  is  the  liberty  our  fathers  established — the  liberty 
of  civilization — the  liberty  of  the  free.  Where  it  is,  slavery  never 
is ;  j  ustice  holds  her  court,  and  each  individual  citizen  is  free  be- 
cause every  other  citizen  is  restrained  from  the  invasion  of  his 
rights.  This  must  be  the  rule  in  a  government  like  ours,  of  the 
people  and  by  the  people.  Here  the  law  is  the  source  of  justice; 
the  foundation  of  liberty.  Here  all  men's  rights  are  defined  by  the 
law.  Here  the  law  stands  between  the  liberties  of  all  that  the  liberty 
of  none  may  be  invaded.  Here  the  law  lays  no  restraints  upon 
the  freedom  of  the  good ;  its  hand  falls  upon  the  bad  alone.  Here 
every  power  the  law  bestows,  either  upon  the  people  or  upon  those 
who  govern  them,  is  circumscribed  and  limited  by  the  law  itself. 
Here  every  guard  and  security  essential  to  the  preservation  of  free 
institutions  is  found  imbedded  in  the  law  of  the  land,  and  here  the 
law  cannot  be  long  or  often  departed  from  without  peril  to  all  that 
is  worth  saving  in  State  or  in  Nation.  Here  there  must  be  obedience 
to  the  law  so  glad  and  so  entire  that  its  restraints  shall  be  unfelt. 
Here  the  Nation  itself  is  held  together  by  law.  It  is  the  bond  that 
binds  the  States  together  and  keeps  the  "Many  in  One"  from  fall- 
ing asunder.  Here  the  people,  having  the  power  to  make  the  law 
and  to  change  or  repeal  it  at  will,  have  no  excuse  for  its  violation. 

J.  FRANK  HANLY. 


106 
ADDENDA. 


Pardons,   Paroles,   Remissions   of   Fines   and    Commutations   granted  -by    the 
Governor  of  Indiana  during   the   years  1905-1906. 

April  7,  1905— 

Bert  Taylor  (Marion  County  workhouse),  pardon;  in  ad- 
vanced stage  of  tuberculosis,  and  pardon  recommended  by 
the  State  Board  of  Pardons. 

Ora  Sturgis  (State  Prison),  parole;  recommended  by  State 
Board  of  Pardons. 

April  10,  1905— 

Harry  Veach  (Marion  County  workhouse),  pardon. 

June  2,  1905— 

Wm.  H.  Kimberlin  (Marion  County  workhouse),  pardon;  in 
advanced  stage  of  tuberculosis. 

June  3,  1905— 

Richard  Roach  (Marion  County  workhouse),  pardon. 

June  10,  1905— 

Edison  Barnhart  (Indiana  Reformatory),  parole;   in  advanced 

stage  of  tuberculosis. 
Zebulum  Ford   (Indiana  Reformatory),  parole;    in  advanced 

stage  of  tuberculosis. 

June  17,  1905— 

Thomas  Fitzgerald  (Marion  County  workhouse),  parole. 

June  20,  1905— 

Samuel  Peters  (Benton  County  jail),  parole;  (revoked  October 
22,  1906). 

June  24, 1905— 

Edward  McGeehee,  pardon  (paroled  by  Governor  Durbin). 

July  15,  1905— 

Andrew  Holt  (Indiana  Reformatory),  pardon  (fatally  ill). 

July  18,  1905— 

Edward  Donahue,  commutation  of  death  sentence  to  life  im- 
prisonment in  the  Indiana  State  Prison. 

July  26,  1905— 

John  Perry  (Benton  County  jail),  remission  of  fine. 


107 

August  2,  1905— 

Charles  Poor  (State  Prison),  parole. 

August  25,  1905— 

Sherman  Crouch  (Tippecanoe  County  jail),  pardon. 

November  14,  1905— 

Thomas  Hodgin  (Hamilton  County  jail),  remission  of  fine. 

December  22,  1905— 

James  L.   Myers    (State   Prison),   pardon;    recommended   by 

State  Board  of  Pardons. 
John  E.  Davis  (State  Prison),  pardon;  recommended  by  State 

Board  of  Pardons. 

January  22,  1906— 

Ed.  Kennedy  (Benton  County  jail),  pardon  and  remission  of 

fine. 
Carl  Carlson  (Indiana  Reformatory),  pardon;  totally  blind. 

February  14,  1906— 

William  Reasoner  (State  Prison),  remission  of  fine;  (paroled 
by  Prison  Parole  Board  and  had  received  final  discharge). 

March  24,  1906— 

Brick   Hop  wood    (Marion   County   workhouse),    remission   of 

fine. 

Claude  Riddlebarger  (Randolph  County  jail),  remission  of 
fine. 

April  17,  1906— 

Orlie  Costin   (State  Reformatory),  parole;    recommended  by 

State  Board  of  Pardons. 
Otto  Doebler  (Lake  County  jail),  pardon;   fatally  ill. 

May  18,  1906— 

John  Moon  (Tip ton  County  jail),  remission  of  fine. 

May  19,  1906— 

William  Cook  (State  Reformatory),  pardoned  in  order  that  he 
might  be  tried  for  murder  under  indictment  in  the  St.  Jo- 
seph Circuit  Court. 

May  29,  1906— 

Matthew  Johnson  (Marion  County  workhouse),  parole. 

August  8,  1906— 

Zora  Hinckley  (Marion  County  workhouse),  pardon;  in  ad- 
vanced stage  of  tuberculosis. 


108 

August  15,  1906— 

Charlotte   Eppes    (Women's   Prison),   pardon;    in   precarious 
physical  condition. 

November  16,  1906— 

Alex  Adair  ( Marion  County  workhouse ) ,  pardon  ;   in  advanced 
stage  of  tuberculosis. 

November  28,  1906— 

William  Wolsiffer  (Indiana  Reformatory),  parole. 

December  22,  1906— 

Everett  Van  Auken  (State  Prison),  parole. 

Tone  Tompkins  (Rush  County  jail),  parole  and  remission  of 

fine. 
Scott  Crawley  (State  Reformatory),  parole;    recommended  by 

State  Board  of  Pardons. 
Myra  Freeze    (Woman's   Prison),   pardon;    recommended   by 

State  Board  of  Pardons. 
Granville    Costin    (State   Prison),    pardon;     recommended   by 

State  Board  of  Pardons. 
Fred  Vaughn,  remission  of  forfeited  recognizance  bond. 


109 


TO  THE  SIXTY-FIFTH  GENERAL  ASSEMBLY. 

CONVENED  IN  SPECIAL  SESSION. 


SEPTEMBER  18,  1908. 

Gentlemen  of  the  Senate  and  House  of  Representatives: 

You  are  convened  in  extraordinary  session  because  the  welfare 
of  the  State  requires  it.  The  matters  I  submit  to  you  are  impor- 
tant, but  they  will  not,  I  hope,  necessitate  more  than  a  brief  ses- 
sion. Unity  of  action  and  singleness  of  purpose  to  meet  the  re- 
quirements of  the  public  welfare,  will  enable  you  speedily  to  re- 
turn to  your  homes.  The  Constitution  imposes  upon  the  Execu- 
tive the  duty  of  giving  you  "information  touching  the  condition 
of  the  State"  and  of  recommending  for  your  consideration  "such 
measures  as  he  shall  judge  to  be  expedient." 

The  following  specific  appropriations  were  made  at  the  late 
regular  session  of  the  General  Assembly  for  the  State  institutions 
named,  to  wit: 

SPECIFIC  APPROPRIATIONS. 

Purdue  University,  agricultural  experiment  station  building, 
$100,000.00.  The  Indiana  Girls'  School,  one  cottage,  $25,000.00. 
The  Indiana  Village  for  Epileptics,  for  buildings  and  equipment, 
$75,000.00.  The  Indiana  State  Normal  School,  library,  $99,- 
970.00.  The  Indiana  School  for  the  Deaf,  dormitories,  equipment, 
etc.,  $367,272.00.  The  Indiana  Southeastern  Hospital  for  the 
Insane,  eighteen  buildings,  equipment,  etc.,  $559,377.82.  Total, 
$1,226,619.82.  Of  this  aggregate  sum,  $410,645.03  have  been 
expended,  leaving  unexpended  balances  aggregating  $815,974.79. 

There  was  also  appropriated  at  the  late  regular  session  the  sum 
of  $53,000.00  for  the  following  purposes,  to  wit: 

A  statue  of  General  Lew  Wallace  for  the  National  Capitol, 
$5,000.00.  A  monument  in  honor  of  the  Indiana  soldiers  who 
died  at  Anderson ville,  Georgia,  during  the  civil  war,  $10,000.00. 
Monuments  marking  the  position  of  the  different  Indiana  military 
organizations  at  Vicksburg,  Mississippi,  $38,000.00. 

Substantially  all  of  these  several  sums  are  unexpended,  making 
an  aggregate  unexpended  balance  of  approximately  $869,000.00. 

Contracts  for  the  construction  of  the  buildings,  structures  and 
monuments  named  have  been  let  and  the  work  of  construction  is 
well  under  way,  but  no  one  of  them  is  now  completed  or  can  be 
completed  by  the  30th  instant. 


110 

The  agricultural  experiment  station  building  is  under  roof, 
but  is  otherwise  incomplete.  Of  this  appropriation  $21,480.00  are 
unexpended,  and  under  the  law  will  lapse  and  cease  to  be  available 
on  the  30th  instant. 

The  new  cottage  at  the  Girls'  School  is  under  roof,  but  is 
incomplete;  $17,982.75  of  the  sum  appropriated  for  it  is  unex- 
pended, and  will  lapse  and  cease  to  be  available  on  the  30th  instant. 

The  new  buildings  at  the  Village  for  Epileptics  are  enclosed 
and  under  roof.  One  of  them,  however,  is  otherwise  incomplete. 
Of  this  appropriation  $17,084.13  are  unexpended,  and  under  the 
law  will  lapse  and  cease  to  be  available  on  the  30th  instant. 

The  new  library  at  the  State  Normal  School  is  not  yet  under 
roof.  Only  a  small  portion  of  the  appropriation  made  for  it  has 
been  expended,  leaving  an  unexpended  balance  of  $87,096.29. 
This  unexpended  balance  will  lapse  and  cease  to  be  available  on 
the  30th  instant. 

The  new  dormitories  at  the  School  for  the  Deaf .  are  being 
placed  under  roof,  but  are  otherwise  incomplete.  Of  the  sum  ap- 
propriated for  them  $171,395.25  is  unexpended,  and  will  lapse 
and  cease  to  be  available  on  the  30th  instant. 

The  eighteen  buildings  at  the  Southeastern  Hospital  for  the 
Insane  are  but  partially  constructed.  Some  of  the  buildings  cov- 
ered by  the  general  appropriation  of  1905  are  under  roof,  but  the 
buildings  covered  by  the  appropriation  made  at  the  regular  ses- 
sion of  the  present  Assembly  are  in  a  condition  that  requires  con- 
tinuous effort  and  prompt  prosecution  of  the  work  to  save  them 
from  damage  and  deterioration  during  the  coming  winter.  Some 
are  ready  for  roofing;  the  walls  of  others  are  nearly  completed. 
None  can  be  gotten  under  roof  during  the  present  month ;  $500,- 
936.37  of  the  sum  appropriated  for  their  construction  will  lapse 
and  cease  to  be  available  on  the  30th  instant.  If  these  buildings 
are  left  in  their  present  condition  the  damage  to  all  of  them  will 
be  great  and  to  some  of  them  irreparable. 

The  need  of  this  hospital  is  imperative.  All  the  existing  hos- 
pitals for  the  insane  are  crowded  to  their  limit.  A  thousand  other 
insane  persons  are  either  being  inadequately  cared  for  by  friends 
or  are  confined  in  county  infirmaries  or  county  jails.  Unnecessary 
delay  in  the  completion  and  opening  of  this  institution  would  be 
little  less  than  criminal. 

The  appropriations  for  these  buildings  were  not  made  available 
until  October  1,  1907, — last  year.  Section  5  of  the  act  of  1907, 
defining  the  fiscal  year  and  providing  for  the  covering  of  unex- 


Ill 

pended  appropriations  into  the  general  fund  of  the  treasury,  makes 
it  the  duty  of  the  Treasurer  of  State  "biennially,  at  the  end  of  the 
fiscal  year  immediately  preceding  each  regular  session  of  the  Gen- 
eral Assembly,  to  cover  and  transfer  into  the  general  fund  of  the 
treasury  the  unexpended  balances  of  all  specific  appropriations  ex- 
cept such  as  shall  have  been  made  available  beyond  said  time  by 
the  act  appropriating  the  same." 

None  of  the  appropriations  to  which  I  have  called  your  atten- 
tion is  made  available  beyond  the  end  of  the  present  fiscal  year, 
the  30th  instant,  by  the  act  authorizing  them.  Therefore,  all  will 
lapse  and  cease  to  be  available  at  that  time. 

These  provisions  of  the  law  limit  the  time  in  which  the  several 
appropriations  named  are  available  to  a  single  building  season. 
It  has  been  physically  impossible  to  complete  groups  of  buildings 
such  as  those  at  the  School  for  the  Deaf  and  at  the  Southeastern 
Hospital  for  the  Insane  within  that  time. 

Provision  for  the  continuance  of  each  of  these  appropriations 
should  be  made.  Failure  to  do  so  will  have  the  effect  to  suspend 
the  work  of  construction  on  all  these  buildings  on  the  date  named. 
The  Sixty-sixth  General  Assembly  will  convene  in  regular  session 
at  a  season  of  the  year  when  construction  work  cannot  be  success- 
fully prosecuted.  Unless  payment  to  the  contractors  having  their 
construction  in  charge  is  authorized  by  a  continuance  of  the  appro- 
priations heretofore  made,  the  buildings  will  be  left  in  an  incom- 
plete and  unfinished  condition  until  the  building  season  opens 
next  year.  I  therefore  submit  to  you  the  need  of  prompt  legisla- 
tion which  shall  continue  each  of  said  several  appropriations  and 
make  them  available  for  the  purposes  named  until  the  end  of  the 
fiscal  year  1909. 

The  new  cottage  at  the  Girls'  School  cannot  be  constructed, 
equipped  and  made  ready  for  occupancy  for  the  sum  appropriated, 
$25,000.00.  The  board  of  trustees  has  not  contracted  a  liability 
beyond  this  sum,  but  I  am  advised  that  direct  heating  and  water 
connection  will  necessarily  have  to  be  made  between  the  cottage 
and  the  power  house.  The  estimated  cost  of  this  line  and  its  con- 
nections is  $10,000;  the  cost  of  plumbing,  sewerage,  electric  light- 
ing, cistern  and  equipment  is  $4,000.00 ;  furnishings,  $3,000.00, 
making  a  necessary  additional  appropriation  of  $17,000.00.  This 
should  be  made  at  the  present  session,  as  the  building  will  damage 
unless  heat  can  be  carried  to  it  before  winter. 

An  appropriation  of  $6,500.00  was  made  at  the  late  session 
of  the  General  Assembly  for  a  storehouse  and  cold  storage  plant 


112 

at  the  Girls'  School.  This  plant  is  now  nearing  completion,  but 
an  additional  sum  of  $2,000.00  is  required  to  equip  and  make  the 
plant  ready  for  use.  This  item  should  be  included  and  added  to 
any  appropriation  you  may  make  for  this  institution. 

The  contract  for  the  construction  of  the  buildings  at  the 
Southeastern  Hospital  for  the  Insane  was  originally  let  to  E.  M. 
Campfield  for  the  sum  of  $1,171,798.00. 

Mr.  Campfield  entered  upon  the  work  of  construction  imme- 
diately after  the  execution  of  his  contract,  but  his  work  was  so 
unsatisfactory,  so  deficient  in  quality  of  workmanship  and  of  ma- 
terial he  sought  to  use,  and  was  prosecuted  with  such  indifference, 
delay  and  lack  of  good  faith,  that  the  commission  was  compelled, 
in  order  to  protect  the  interests  of  the  State,  to  forfeit  his  con- 
tract in  March  of  the  present  year.  The  commission  took  posses- 
sion, for  the  benefit  of  the  State,  of  all  materials  on  the  ground, 
as  provided  for  by  the  statute  and  the  terms  of  the  contract  with 
Mr.  Campfield.  Every  effort  was  made  to  induce  the  surety  on 
Mr.  Campfield's  bond  to  take  up  the  work  and  complete  it,  but  with- 
out avail.  Then  the  commission  advertised  for  the  reletting  of  the 
contract  by  full  advertisement  as  provided  by  law.  Six  bids  were 
received,  and  on  May  1,  1908,  the  work  was  reawarded  and  re- 
let  to  Messrs.  Pulse  &  Porter,  the  lowest  bidders,  for  the  sum  of 
$853,909.35.  This  sum,  taking  into  account  the  work  done  by 
Mr.  Campfield  and  the  sum  paid  him  therefor,  is  $151,738.11  in 
.excess  of  Mr.  Campfield's  contract.  Mr.  Campfield's  bid  was  $73,- 
193.00  below  his  nearest  competitors,  and  his  contract  one  that 
could  not  be  performed  without  loss. 

The  commission  made  a  contract  with  Messrs.  Pulse  &  Porter 
to  the  extent  of  present  appropriations,  and  entered  into  a  provi- 
sional contract  for  the  completion  of  the  buildings  named  therein, 
subject  to  the  ratification  thereof  by  the  General  Assembly  and 
the  appropriation  of  a  sum  sufficient  to  complete  the  same.  The 
work  at  the  institution  was  delayed,  because  of  Mr.  Campfield's 
failure  and  the  consequent  forfeiture  of  his  contract,  the  readver- 
tisement  and  the  reletting  of  the  same,  for  a  period  of  two  months. 

The  contract  between  the  commission  and  Messrs.  Pulse  Si 
Porter  is  a  just  one.  They  are  doing  their  work  in  a  satisfactory 
manner,  both  as  to  quality  of  material  being  used  and  character 
of  workmanship,  and  are  pressing  the  work  in  a  manner  to  evidence 
their  good  faith.  The  contract  with  them  should  be  affirmed  and 
legalized  at  this  session,  that  there  may  be  no  technical  defense 
when  suit  is  brought  upon  the  bond  of  Mr.  Campfield.  The  sum 


113 

of  $151,738.11  should  be  appropriated  in  addition  to  the  appro- 
priations heretofore  made,  and  should  be  immediately  available,  for 
the  completion  of  the  buildings  named  in  such  contract,  and  should 
continue  available  until  the  end  of  the  fiscal  year  1910.  This  is  of 
immediate  and  pressing  importance,  and  I  trust  you  will  not  fail 
to  give  it  early  and  favorable  consideration.  The  State  has  ample 
money  to  meet  all  these  necessities,  there  being  at  the  time  of  writ- 
ing this  message  $896,180.76  in  the  treasury,  with  half  a  year's 
revenues  to  accrue  in  December. 

I  cannot  urge  these  institutional  needs  too  earnestly.  Failure 
will  mean  substantial  loss  to  the  State,  embarrassment  to  contract- 
ors, and  may  lead  to  many  legal  complications. 

APPROPRIATIONS    FOR   MAINTENANCE. 

By  recent  legislation  the  Girls'  School  and  the  Women's  Prison 
were  separated,  the  school  removed  to  a  site  near  Clermont  and 
the  Women's  Prison  remodeled  and  a  portion  of  the  building  con- 
verted into  a  workhouse  for  women.  The  actual  separation  of  the 
institutions  was  effected  in  July,  1^07.  The  cost  of  administration 
in  the  separate  institutions  has  necessarily  been  greater  than  the 
administration  of  the  single  institution.  The  appropriation  made 
for  the  maintenance  of  each  has  been  greatly  insufficient  to  meet 
the  new  conditions.  Both  institutions  are  now  being  efficiently  ad- 
ministered and  the  improvement  in  the  administration  of  each  has 
been  such  as  to  amply  justify  the  separation  of  the  two  institutions. 

Up  to  August  1,  1908,  I  paid  out  of  the  Governor's  emergency 
contingent  fund,  for  the  maintenance  of  the  Girls'  School, 
$8,945.45.  August  and  September  bills  for  maintenance  are  yet 
to  be  met.  To  meet  these  bills  an  appropriation  of  $8,000.00  will 
be  necessary.  Up  to  September  1st  I  paid  out  of  the  Governor's 
emergency  contingent  fund,  for  maintenance  of  the  Woman's 
Prison,  $3,236.58,  with  September  bills  for  maintenance  still  to 
be  met.  These  will  require  an  additional  appropriation  of 
$1,000.00.  The  appropriation  made  for  the  Boys'  School  has  also 
been  found  insufficient.  August  and  September  bills  are  to  be  pro- 
vided for.  An  additional  appropriation  of  $7,000.00  will  be  re- 
quired. The  exigencies  of  the  other  institutions  have  from  time  to 
time  drawn  upon  the  emergency  contingent  fund  during  the  fiscal 
year  until  it  is  now  insufficient  to  meet  these  demands.  The  main- 
tenance appropriation  for  these  institutions  which  will  become 
available  on  October  1st,  cannot  be  used  to  meet  the  unpaid  ac- 
counts of  such  institutions  for  the  present  fiscal  year.  Therefore, 
[8—19891] 


114 

the  appropriations  suggested  are  absolutely  essential  to  their  ad- 
ministration. The  year  just  closing  has  been  a  hard  one  on  all 
the  institutions  of  the  State.  Provisions  have  been  high.  In  most 
cases  unusually  so.  Gardens  upon  which  the  Girls'  School  and 
the  Boys'  School  have  largely  depended  for  sustenance  during  the 
summer  have  been  wholly  inadequate  to  meet  their  needs  because  of 
the  long-continued  drouth. 

NIGHT   RIDERS. 

In  the  early  spring  numerous  raids  were  made  in  the  part  of 
the  State  bordering  upon  the  Ohio  river  by  so-called  "night  riders" 
upon  the  property  of  persons  engaged  in  the  growing  of  tobacco, 
resulting  in  the  destruction  of  a  number  of  tobacco  beds  where 
young  plants  were  being  grown  preparatory  to  transplanting  in 
the  fields.  Many  threatening  letters  were  written  warning  the 
growers  net  to  plant  a  tobacco  crop  for  this  year,  and  threaten  ing 
personal  violence  and  the  destruction  of  property  if  the  crop  were 
planted.  I  have  done  what  I  could  under  the  limited  authority 
conferred  upon  the  Governor  by  law  and  with  the  meager  funds 
in  my  hands,  to  apprehend  these  persons  and  protect  the  persons 
and  property  of  citizens  in  that  section  of  the  State.  In  a  few 
weeks  the  tobacco  crop  will  be  cut  and  housed  in  sheds  and  barns. 
Many  threatening  letters  are  again  being  received  by  the  tobacco 
growers  warning  them  not  to  cut  their  crops  at  peril  of  the  destruc- 
tion of  crops  and  barns  by  fire-.  For  a  year  past  one-third  of  the 
neighboring  State  of  Kentucky  has  been,  and  now  is,  in  a  state 
of  anarchy ;  neither  life  nor  property  is  secure.  Property  has 
been  destroyed  and  a  number  of  persons  murdered.  Depredations 
have  been  committed  in  Ohio  necessitating  special  legislation  and 
the  conferring  of  special  authority  upon  officers  in  that  State  to 
preserve  the  property  and  lives  of  her  citizens. 

The  protection  of  property  and  its  peaceful  enjoyment  and 
the  preservation  of  the  lives  of  its  people  are  among  the  primal 
reasons  for  the  maintenance  of  any  government.  I  cannot  consent 
that  the  government  of  this  Commonwealth  shall  fail  in  this  behalf. 
Under  the  present  law  I  have  neither  authority  nor  money  with 
which  to  prevent  it. 

I  therefore  recommend  the  enactment  of  a  statute  for  the  pro- 
tection of  tobacco  growers,  making  the  destruction  of,  or  injury  to, 
tobacco,  cither  in  the  field  or  after  the  same  shall  be  severed  from 
the  soil,  a  criminal  offense,  and  fixing  a  severe  penalty  therefor.  I 
also  recommend  legislation  authorizing  and  directing  the  Governor 


115 

to  appoint  such  number  of  persons  as  he  may  deem  necessary  to 
act  as  secret  service  officers,  to  detect  or  apprehend  any  person  or 
persons  engaged  in  the  malicious  destruction  of  tobacco  plants  or 
other  property  of  persons  engaged  in  growing,  curing  and  mar- 
keting of  tobacco;  giving  to  such  officers  the  powers  of  a  sheriff 
or  other  police  officer  to  arrest  and  detain  until  a  legal  warrant  can 
be  obtained  any  person  or  persons  found  violating  any  of  the  laws 
of  this  State  enacted  to  prevent  the  destruction  or  injury  of  to- 
bacco, and  giving  to  the  Governor  authority  to  fix  the  compensation 
of  such  officers  in  addition  to  their  actual  and  necessary  expenses, 
and  the  making  of  an  appropriation  of  $15,000.00  for  the  payment 
and  compensation  of  such  officers  and  their  necessary  expenses. 

The  enactment  of  such  legislation  will  of  itself  have  a  deterring 
effect  upon  those  engaged  in  the  unlawful  practices  to  which  I 
have  adverted  and  will  enable  the  Executive  to  meet  with  greater 
efficiency  the  conditions  that  are  likely  to  arise. 

VINCENNES  UNIVERSITY  CLAIM. 

An  act  was  passed  at  the  late  regular  session  of  the  General 
Assembly  providing  for  the  issuing  of  $120,548  of  bonds  of  the 
State  to  the  trustees  of  Vincennes  University.  This  act  creates  a 
State  debt,  principal  and  interest,  of  more  than  $156,000.00.  The 
bonds  were  prepared  by  the  Auditor  of  State  and  tendered  to  me 
for  Executive  signature.  I  have  not  executed  them  because  of  a 
firm  conviction  that  the  statute  authorizing  them  is  unconstitu- 
tional. While  the  claim  of  the  University  against  the  State  is  un- 
founded and  wholly  without  merit,  this  fact  would  not  have  im- 
pelled me  to  withhold  my  signature.  The  act  was  passed  over  Ex- 
ecutive veto,  and  if  it  were  a  valid  act  it  would  be  my  duty  to  exe- 
cute the  bonds,  whatever  I  might  think  of  the  merit  of  the  claim.  If, 
however,  as  I  verily  believe,  the  act  is  invalid  because  of  its  con- 
travention of  the  plain  provisions  of  the  Constitution,  I  would  be 
violating  my  oath  of  office  to  issue  the  bonds.  My  obligation  is  to 
support  the  Constitution  of  the  State.  If  the  act  contravenes  the 
Constitution,  it  is  not  a  law,  and  I  am  under  neither  legal  or  moral 
obligation  to  do  any  act  under  it.  Indeed,  any  act  taken  would 
in  such  case  be  invalid,  and  a  violation  of  both  my  legal  and  moral 
obligation. 

The  facts  set  forth  in  the  veto  message  of  the  act  in  question 
are  such  as  to  convince  any  unbiased  investigator  of  the  claim's 
utter  lack  of  merit. 

I  have  submitted  the  question  of  the  constitutionality  of  the 


116 

act  to  Messrs.  Miller,  Shirley  &  Miller,  counsel  of  ability  and 
eminence  in  their  profession,  and  I  am  advised  by  them  that  in 
their  opinion  the  act  contravenes  Section  5  of  Article  10  of  the  Con- 
stitution and  is  void. 

I  have  also  submitted  the  question  of  the  constitutionality  of 
the  act,  considered  in  the  light  of  the  facts  set  forth  in  the  veto 
message,  to  the  Attorney-General,  and  I  am  advised  by  him  that 
upon  the  facts  stated  the  act  is  clearly  unconstitutional. 

I  therefore  deem  it  my  duty  to  ask  you  to  examine  the  opinion 
of  Messrs.  Miller,  Shirley  &  Miller,  together  with  that  of  the  At- 
torney-General, and  to  re-examine  the  facts  as  set  forth  in  my  for- 
mer message.  Calm  and  candid  consideration  of  these  I  am  per- 
suaded will  lead  you  to  support  the  act's  repeal.  Its  repeal  will 
save  the  State  more  than  $156,000.00,  principal  and  interest,  a 
sum  sufficient  to  several  times  defray  the  expense  of  the  present 
session.  No  new  right  has  accrued  to  the  University  since  the 
passage  of  the  act.  The  merit  of  their  claim  is  now  precisely  what 
it  was  before  the  act  was  passed.  The  status  of  neither  party  has 
changed.  Their  rights  will  therefore  not  be  affected  by  the  repeal 
of  the  statute. 

If  the  claim  of  the  University  against  the  State  is  not  valid  in 
law,  the  General  Assembly  has  no  authority  to  authorize  the  issuing 
of  bonds  or  the  creation  of  a. debt  to  meet  it.  It  cannot  make  a 
gift  to  the  University  in  that  way.  It  cannot  incur  a  debt  for 
that  purpose.  The  issuing  of  the  bonds  is  an  attempt  to  create  a 
debt.  They  are  obligations  of  the  State  to  pay  the  holder  of 
them,  principal  and  interest,  $156,000.00.  If  they  are  invalid 
they  ought  not  to  be  issued  to  find  their  way  into  the  hands  of  in- 
nocent investors. 

If  the  State  desires  to  bestow  a  gratuity  upon  the  University 
because  it  is  an  educational  institution  which  the  State  wishes  to 
foster,  it  must  bestow  the  gratuity  in  money  and  not. in  evidences 
of  indebtedness.  If  it  docs  that,  it  is  entering  upon  a  policy  of 
such  far-reaching  import  as  to  cause  thoughtful  men  to  hesitate 
before  yielding  assent  thereto.  If  the  State  is  to  give  Vincennes 
University  $156,000  in  the  next  ten  years,  why  shall  it  not  give 
similar  amounts  to  Wabash  College,  to  DePauw  University,  to 
Franklin,  to  Hanover,  to  Earlham,  and  to  the  other  colleges  and 
universities  of  the  State,  all  of  which  are  schools  of  at  least  equal 
merit,  doing  equally  efficient  work?  Such  a  policy  simply  means 
the  taking  over  for  maintenance  of  all  the  higher  institutions  of 


117 

learning  of  the  Commonwealth,  and  involves  a  departure  from  the 
precedents  of  a  hundred  years. 

Copies  of  the  opinion  of  Messrs.  Miller,  Shirley  &  Miller,  of  the 
opinion  of  the  Attorney-General  and  of  the  veto  message  will  be 
supplied  you  for  examination  and  consideration. 

COUNTY  LOCAL  OPTION. 

The  welfare  of  the  State,  viewed  from  either  a  moral  or  an 
economical  standpoint,  requires  the  enactment  of  a  law  giving  to 
the  qualified  voters  of  the  respective  counties  of  the  State  the  right 
to  vote  upon  the  question  of  the  exclusion  of  the  liquor  traffic  from 
any  such  county.  In  my  judgment  it  is  both  expedient  and  right 
that  this  legislation  be  enacted  now. 

The  traffic  in  intoxicating  liquors  is  owned  and  controlled  to- 
day by  a  few  men.  It  is  closely  and  compactly  organized,  both 
for  defense  and  aggression.  Its  conduct  has  become  such  as  to 
challenge  the  thoughtful  consideration  of  the  people  of  every  State 
in  the  Union.  In  this  Commonwealth  this  is  especially  true. 

The  independent  retail  dealer,  owner  of  his  place  of  business 
and  responsible  to  the  community  where  he  does  business  and  in 
which  he  lives,  is  fast  becoming  a  memory.  He  has  almost  ceased 
to  be.  More  than  thirty-five  per  cent,  of  the  places  where  liquors 
are  sold  at  retail,  to  be  drunk  on  the  premises  where  sold,  are  owned 
or  controlled  by  brewery  corporations,  whose  directors  and  officers 
live  out  of  the  vicinity  where  the  business  is  carried  on,  and  who 
have  no  interest  or  identity  with  the  people  of  such  communities. 
Many  of  them  live  in  palatial  residences  in  fashionable  quarters  in 
the  larger  cities  of  the  State,  far  removed  from  the  scenes  of  the 
barrooms  they  maintain. 

These  men,  acting  through  the  legal  fiction  called  a  corpora- 
tion, buy  or  rent  the  buildings  where  the  business  is  conducted. 
They  own  the  fixtures.  They  furnish  the  liquors.  They  pay  the 
license  fee.  Where  taxes  are  paid,  they  pay  them.  The  law  in- 
hibits the  issuing  of  a  license  to  a  corporation.  To  evade  this, 
license  is  taken  in  the  name  of  some  irresponsible  person  who  owns 
no  property  and  has  no  concern  and  no  mission  except  to  sell  in- 
toxicants to  anybody,  at  any  hour,  on  any  day,  in  order  that  his 
master,  the  brewer,  may  gather  his  daily  measure  of  profit.  The 
brewery  corporation,  the  brewer  himself,  or  some  paid  agent  exe- 
cutes the  bond  required  of  the  licensee,  and  he  is  given  to  under- 
stand that  he  must  conduct  the  place  turned  over  to  him  at  a  profit 


118 

to  his  master,  and  that  he  may  evade  the  law  without  substantial 
risk.  If  he  is  prosecuted,  he  is  defended.  If  he  is  fined,  his  fine  is 
paid.  His  place  is  a  rendezvous  for  the  idle,  the  vicious  and  the 
criminal — a  hot-bed  for  the  breeding  of  vice  and  crime.  In  time 
of  civic  excitement  or  social  disorder,  arson  and  murder  issue  from 
it  like  beasts  from  a  lair.  This  is  the  experience  and  this  the  testi- 
mony of  every  city  that  has  become  the  victim  of  the  mob  or  whose 
laws  have  been  defied  by  riot. 

Those  in  control  of  these  places  are  concerned  about  nothing 
but  profits  and  increased  revenue.  To  obtain  these  they  multiply 
saloons,  plant  them  in  residential  districts,  and  establish  them  in 
communities  where  saloons  otherwise  would  not  go.  For  years  they 
have  stood  for  and  have  countenanced  anything  that  would  pro- 
mote the  sale  and  consumption  of  their  products,  lawful  or  un- 
lawful. 

The  aggression  and  the  intolerance  of  the  traffic,  coupled  with 
its  utter  disregard  of  law,  led  the  Sixty-fourth  General  Assembly 
to  enact  a  law  giving  to  the  majority  of  the  legal  voters  of  any 
township  or  city  ward  the  power,  by  remonstrance  filed  with  the 
board  of  county  commissioners,  to  exclude  the  traffic  from  such  Jter- 
ritory  for  a  period  of  two  years. 

Under  the  provisions  of  this  law  the  traffic  has  been  excluded, 
in  three  and  one-half  years,  from  880  of  the  1,016  townships  in 
the  State ;  from  many  city  wards ;  from  a  number  of  cities,  and 
from  25  entire  counties.  More  than  1,600,000  people  now  live  in 
territory  where  there  is  no  licensed  saloon.  But  this  territory  is 
constantly  invaded  by  the  traffic  and  a  constant  warfare  against 
it  is  necessary  for  its  exclusion.  This  statute  was  enacted  without 
submission  to  the  vote  of  the  people,  but  its  effects  have  been  so 
beneficent  and  the  good  accomplished  under  it  has  been  so  great 
that  the  people  of  the  State  are  unwilling  to  see  it  repealed,  modi- 
fied or  weakened.  So  strong  is  the  sentiment  in  its  behalf  that  both 
the  great  parties  in  the  State  are  pledged  to  maintain  it  inviolate. 
And  the  desire  of  the  people  for  the  further  restriction  of  the 
traffic  is  so  sincere,  so  widespread,  so  manifest  and  insistent  that 
both  parties  have  promised  additional  and  supplemental  legislation. 

Two  methods  are  suggested.  One,  a  township  and  ward  elec- 
tion, where  the  people  of  the  township  or  ward  may  vote  for  or 
against  the  traffic.  The  other,  a  county  election,  where  the  people 
of  each  county  may  vote  for  or  against  it.  Between  these  two  prop- 
ositions both  the  temperance  people  and  the  liquor  interests  of  the 
State  have  made  quick  and  decisive  choice. 


119 

The  first  method  would  add  nothing  to  the  present  statute.  The 
unit  would  be  precisely  the  same  as  that  covered  by  the  present  re- 
monstrance law.  It  would  not  be  a  step  for  the  further  restriction 
of  the  traffic,  but  a  step  toward  the  weakening  of  the  present  re- 
straint. In  practice,  it  would  greatly  impair  if  not  effectually  de- 
stroy the  remonstrance  law.  Operating  over  the  same  territorial 
unit,  conflict  would  ensue  and  the  remonstrance  law  would  be  sup- 
planted. The  township  or  ward  covers  too  small  a  territory  to  be 
an  effective  unit.  No  township  or  city  ward  can  single-handed  pro- 
tect itself  from  the  ravages  and  evils  of  the  traffic  so  long  as  it  is 
permitted  in  the  townships  and  wards  surrounding  it.  A  great  ma- 
jority of  the  citizens  of  a  county  or  a  city  may  be  opposed  to  the 
traffic,  but  while  a  single  township  or  city  ward  favors  it,  though 
by  a  majority  of  but  one  legal  voter,  the  county  or  the  city  must 
tolerate  it,  must  suffer  in  silence  without  redress,  denied  a  voice  or 
even  a  hearing  concerning  it.  Thus  the  will  of  the  people  is  made 
ineffectual,  their  purpose  impotent.  A  city  ward  or  township  is 
not  a  substantial  governmental  unit.  They  have  no  officers  qualified 
or  empowered  to  enforce  the  laws  of-  the  State  relating  to  the 
traffic.  The  expense  of  criminal  prosecutions  for  crimes  committed 
in  the  township  or  ward  is  not  borne  by  such  township  or  ward 
alone,  but  by  the  county  as  a  whole.  The  evil  effects  of  the  traffic 
cannot  be  confined  to  their  boundaries  but  reach  all  the  people  of 
the  county.  Township  or  ward  local  option  by  election  is  a  kind 
of  home  rule  but  little  better  than  that  which  would  follow  if  the 
unit  were  a  precinct,  a  city  block,  a  single  flat  in  a  city,  or  the 
house  of  a  single  family.  Carried  to  its  last  analysis,  it  localizes 
the  option  to  the  individual  conscience  of  each  citizen  and  takes 
away  all  right  of  society  as  represented  in  the  majority  to  have  a 
voice  in  the  matter.  It  is  not  government  by  majority,  but  gov- 
ernment by  the  minority.  It  is  not  the  rule  of  the  people,  but  the 
rule  of  the  few. 

The  county  is  a  well  recognized  and  long  established  unit  of 
government.  It  has  officers  and  courts  and  the  machinery  by 
which  the  law  of  the  State  can  be  enforced.  The  people  of  this 
unit  all  share  the  cost  of  criminal  prosecutions  for  crimes  commit- 
ted within  it.  The  traffic's  evil  effects  can  more  nearly  be  confined 
to  its  borders. 

The  difference  between  the  two  methods  is  emphasized  and  ac- 
centuated by  the  character  of  those  who  support  them.  Good  men 
may  be  back  of  the  township  and  ward  unit,  but  back  of  it  are  also 
the  allied  liquor  interests  of  the  State,  organized  as  a  single  unit. 


120 

Every  brewer, .  every  distiller,  every  saloon-keeper,  the  keeper  of 
every  brothel  and  of  every  unlawful  resort,  and  every  allied  inter- 
est than  can  be  reached,  individual  or  corporate,  are  supporting  it, 
and  they  are  not  half-hearted  in  their  support  of  it  as  against 
county  option.  They  are  desperately  in  earnest.  They  are  here 
and  will  be  here  throughout  this  session,  active,  dominant,  arro- 
gant, intimidating  and  corrupting,  prepared  to  defeat  county  op- 
tion at  any  cost  or  by  any  means  within  their  power.  They  seek 
through  you  to  take  over  unto  themselves  the  enactment  of  law. 
They  are  reaching  for  the  reins  of  government,  everywhere  and  in 
every  department,  that  they  may  administer  it  in  their  own  behalf. 

On  the  other  side  are  the  great  body  of  our  people,  the  many, 
the  masses,  unorganized,  without  celerity  of  movement  or  corrupt- 
ing power.  They  are  for  county  local  option.  They  plead  their 
cause  in  the  open.  The  ministry  of  the  State  of  all  denominations ; 
teachers,  lawyers,  doctors,  manufacturers,  farmers ;  the  moral 
forces  of  the  Commonwealth,  represented  by  the  Christian  church 
and  religious  societies  ;  the  great  rank  and  file  ;  the  multitude  whose 
government  this  is,  whose  commissions  you  hold,  whose  represen- 
tatives you  are.  Thousands  of  them  are  here  and  will  be  here  to 
urge  their  claim  upon  you. 

The  brewery,  the  distillery,  the  saloon,  the  brothel,  on  one  side ! 
The  church,  the  school,  the  home,  on  the  other ! 

County  option  is  in  harmony  with  the  spirit  of  our  institutions. 
It  is  in  accord  with  the  basic  principle  of  American  government. 
It  meets  the  requirement  of  the  great  declaration  that  "govern- 
ments shall  derive  their  just  powers  from  the  consent  of  the  gov- 
erned." 

How  can  a  man  who  enjoys  the  blessings  of  free  popular  gov- 
ernment and  who  professes  to  believe  in  democratic  institutions 
where  the  people  themselves,  by  majority,  exercise  the  right  to  rule, 
consistently  deny  to  the  people  of  the  several  counties  of  this  Com- 
monwealth the  right  to  exclude  this  traffic  from  their  midst,  if  they 
so  desire?  How  can  a  man  who  values  political  freedom  for  him- 
self deny  to  the  three  millions  of  people  in  Indiana  who  desire  to 
be  heard  upon  this  question  the  exercise  of  a  right  so  fundamental  ? 
How  can  a  man  who  believes  in  the  right  of  the  majority  to  decide 
questions  of  tariff  schedules  and  monetary  ratios  refuse  to  submit 
this  question  to  the  forum  of  a  free  people,  or  withhold  from  his 
fellow-citizens  a  freeman's  right  to  vote  upon  it? 

I  reiterate  my  belief  that  it  is  both  expedient  and  right  to  en- 
act this  legislation  now.  If  it  is  right  to  enact  it  next  January,  it 


121 

is  right  to  enact  it  in  September.  Therefore,  I  recommend  to  you 
and  urge  upon  your  favorable  consideration  the  enactment  of  a 
local  option  law  with  the  county  as  a  unit,  giving  to  the  people 
the  right  to  vote  by  counties  upon  the  question,  and  so  drawn  as 
to  preserve  the  present  remonstrance  law.  In  this  I  voice  the 
thought  and  express  the  conscience  and  the  purpose  of  the  people 
whose  servants  we  are.  If  your  enactment  shall  voice  their  thought 
and  express  their  purpose,  you  may  justly  claim  their  approval. 
You  will  thereby  place  the  State  where  the  intelligence,  the  con- 
science and  the  character  of  its  citizens  entitle  it  to  stand.  If  you 
fail,  you  will  have  to  account  to  them,  for  soon  or  late  they  will 
have  their  way  upon  this  great  question.  In  this  neither  the  ma- 
jority nor  the  minority  can  escape  responsibility.  As  individuals 
and  as  representatives  of  the  people,  your  responsibility  is  the 
same,  whether  you  are  of  the  majority  or  of  the  minority.  Right 
is  right,  and  he  who  opposes  it  cannot  long  find  safe  refuge  behind 
the  barricades  of  party. 

The  General  Assembly  is  now  in  session.  You  constitute  it. 
You  have  the  power  to  legislate.  The  people  know  you  have  the 
power.  They  will  not  be  satisfied  with  postponement  or  delay. 
They  expect  you  to  act  upon  this  question  before  you  adjourn. 

These  are  the  reasons  that  impelled  me  to  convene  you  in 
special  session.  In  presenting  them  to  you  I  do  but  discharge 
the  duty  imposed  upon  me  by  the  Constitution.  I  am  conscious 
that  all  of  you  do  not  agree  with  all  I  have  submitted,  and  that 
some  of  you  may  not  agree  with  any  part  of  it.  That  is  your  right. 
And  that  right  I  respect.  But  I  bespeak  for  what  I  have  submitted 
the  careful  and  candid  consideration  which  its  importance  entitles 
it  to  receive,  and  which  may  be  justly  claimed  for  the  views  of  an 
earnest  and  sincere  man,  who  shares  your  responsibility  and  who 
has  thought  much  and  long  upon  the  questions  involved. 

Permit  me,  in  conclusion,  to  express  the  hope  that  the  business 
of  the  session  may  be  promptly  dispatched,  and  that  your  labors 
may  be  signalized  by  loftiness  of  purpose  and  patriotic  devotion 
to  the  public  welfare. 

J.  FRANK  HANLY. 


122 
TO  THE  SIXTY-SIXTH  GENERAL  ASSEMBLY. 


JANUARY  7,  1909. 

Gentlemen  of  the  Senate  and  House  of  Representatives: 

Upon  your  assembling  it  becomes  the  duty  of  the  Executive  to 
submit  to  you  "information  touching  the  condition  of  the  State, 
and  to  recommend  such  measures  as  he  shall  judge  to  be  expedient." 
In  their  majorities  your  respective  bodies  arc  not  in  political 
accord.  This  is  a  condition  that  not  infrequently  effectively  pre- 
vents much  desirable  legislation.  But  the  greater  part  of  the  busi- 
ness that  will  come  before  you  will  not  be  partisan  in  character, 
and  should  have  consideration  quite  aside  from  politics.  In  every 
such  case  it  becomes  the  duty  of  majority  and  minority  to  rise 
above  party  differences  and  meet  each  other  on  the  higher,  broader 
plane  of  common  citizenship  and  the  public  welfare. 

This  I  shall  sincerely  endeavor  to  do  in  what  I  here  present. 
The  information  submitted  is  the  result  of  four  years  of  close 
touch  with  the  institutions  and  the  affairs  of  the  State  and  of 
painstaking  effort,  and  is,  I  believe,  expressed  in  accurate  figures 
and  reliable  statements,  while  the  measures  recommended  are  sug- 
gested by  the  experience  and  observation  incident  to  a  full  constitu- 
tional term  in  the  executive  office. 

CONDITION   OF   FINANCES  AND  SOME   SPECIAL  FUNDS. 

The  financial  condition  of  the  State  is  exceptionally  good.  The 
revenues  for  the  fiscal  year  ending  September  30,  1907,  exclusive 
of  transfer  funds  and  including  a  balance  in  the  treasury  October 
81,  1906,  of  $507,654.60,  aggregate  $4,599,333.58;  the  expendi- 
tures were  $3,701,705.97,  leaving  a  balance  in  the  treasury  at  the 
close  of  the  fiscal  year  ending  September  30,  1907,  of  $897,627.61. 
The  revenues 'for  the  fiscal  year  ending  September  30,  1908,  ex- 
clusive of  transfer  funds  and  including  the  balance  in  the  treasury 
at  the  end  of  the  fiscal  year  1907,  aggregated  $5,217,370.85 ;  the 
expenditures  were  $4,724,253.85,  leaving  a  balance  in  the  treasury 
September  30,  1908,  of  $495,117.00.  In  this  balance  there  was 
no  advance  payment,  nor  were  the  revenues  for  the  present  year 
anticipated  or  impaired. 

The  revenues  for  the  present  fiscal  year,  exclusive  of  transfer 
funds  and  including  the  balance  in  the  treasury  September  30, 
1908,  will  aggregate  $4,637,152.00.  Appropriations  heretofore 


123 

made  for  this  year  and  liable  to  be  disbursed  aggregate  $4,189,- 
121.00,  leaving  an  available  balance  for  specific  purposes  of  $448,- 
031.00.  From  this  balance,  however,  must  be  deducted  the  prob- 
able expense  of  the  present  session  of  the  General  Assembly,  $120,- 
000.00,  leaving  a  net  balance  from  the  regular  revenues  of  $328,- 
031.00  available  for  specific  purposes  for  the  present  fiscal  year. 

The  3  per  cent,  sinking  fund  levy  made  last  year  will  create 
a  revenue  during  the  present  fiscal  year,  coming  into  the  treasury 
in  June,  of  $260,000.  If  this  fund  be  transferred  to  the  general 
fund  the  net  balance  available  for  specific  purposes  for  the  present 
fiscal  year  will  be  $588,031. 

ESTIMATED   REVENUES. 

The  revenues,  based  upon  present  levies  and  existing  valuations, 
for  the  fiscal  year,  1910,  exclusive  of  transfer  funds,  are  conserva- 
tively estimated  at  $3,927,888.  The  regular  expenditures  for  1910 
are  estimated  at  $2,991,326,  leaving  a  balance  for  the  fiscal  year 
ending  September  30,  1910,  available  for  specific  purposes,  of 
$936,562.  The  3  cent  sinking  fund  levy  made  last  year,  coming 
into  the  treasury  in  December,  1909,  and  during  the  fiscal  year 
1910,  will  produce  $240,000.  If  this  fund  be  transferred  to  the 
general  fund  the  aggregate  sum  available  for  specific  purposes  for 
the  fiscal  year  ending  September  30,  1910,  is  conservatively  esti- 
mated at  $1,176,562.  The  revenues  for  the  fiscal  year,  1911,  ex- 
clusive of  transfer  funds  based  on  present  levies  and  valuations, 
are  estimated  at  $3,927,888.  The  regular  expenses  for  the  fiscal 
year  1911  are  estimated  at  $2,991,326,  leaving  a  balance  available 
for  specific  purposes  for  the  fiscal  year  ending  September  30,  1911, 
of  $936,562. 

These  estimates  are  believed  to  be  conservative  and  reliable. 
The  total  funds,  therefore,  available  for  specific  purposes,  between 
now  and  Sptember  30,  1911,  if  the  sinking  fund  revenue  coming 
into  the  treasury  during  the  present  calendar  year  is  transferred 
to  the  general  fund,  will  aggregate  $2,701,155.  This  sum  meas- 
ures the  limit  of  specific  appropriations  for  the  term  indicated  if 
the  revenues  for  the  fiscal  year  ending  September  30,  1912,  are  not 
to  be  impaired. 

AVAILABLE  FUNDS. 

If  the  sinking  fund  revenue  for  the  present  calendar  year  is 
not  transferred  to  the  general  fund,  the  funds  available  for  specific 
purposes  between  now  and  September  30,  1911,  will  aggregate 


124 

$2,201,155,  and  will  measure  the  limit  of  specific  appropriations 
unless  the  revenues  for  the  fiscal  year  ending  September  30,  1912, 
are  anticipated  and  impaired. 

On  the  31st  day  of  October,  1904,  the  close  of  the  fiscal  year 
last  preceding  the  present  administration,  the  treasury  balance  was 
$60,601.93,  but  to  obtain  this  balance  advance  payments  from 
county  treasurers  had  been  called  and  received,  and  the  revenues  for 
1905  anticipated  in  the  sum  of  $154,740.  But  for  these  advance 
payments  there  wrould  have  been  no  treasury  balance,  but  a  deficit 
of  $94,138.07.  September  30,  1908,  after  four  years  of  extensive 
construction  of  public  buildings  aggregating  $3,362,566.90,  this 
deficit  was  recouped  and  an  actual  balance  of  $493,117  accumu- 
lated without  calling  a  single  advance  payment  from  any  county 
treasurer  or  anticipating  the  revenues  of  this  year  a  single  dollar, 
and  without  increasing  the  total  tax  levy  on  account  thereof  the 
fraction  of  a  mill. 

To  do  this,  however,  the  3  cent  sinking  fund  levy  was  trans- 
ferred to  the  general  fund  for  the  years  1905,  1906  and  1907. 
This  was  done  without  impairing  our  ability  to  meet  the  foreign 
bonded  indebtedness  of  the  State  within  six  months  after  the  privi- 
lege to  pay  accrues,  and  four  years  and  a  half  before  the  debt  ma- 
tures. 

PAYMENT  OF  PUBLIC  DEBT. 

Under  the  two  preceding  administrations  a  remarkable  record 
was  made  in  the  payment  of  the  public  debt.  Under  the  first 
$2,216,000.00,  under  the  second  $3,008,000.00,  an  aggregate  dur- 
ing the  two  administrations  of  $5,224,000.00. 

During  the  present  administration  $407,000.00  have  been  paid 
on  the  principal  of  the  State  debt  and  the  last  dollar  of  the  debt 
now  payable  canceled.  This  leaves  a  total  foreign  bonded  indebt- 
edness of  only  $800,000,  none  of  which  will  be  payable  until  Jan- 
uary, 1910,  and  none  of  which  will  be  due  until  1915.  This  entire 
debt  can  be  paid  within  six  months  from  the  date  the  privilege  of 
payment  obtains,  from  the  sinking  fund,  which  will  come  into  the 
treasury  during  the  present  calendar  year  and  the  first  half  of  next 
year. 

The  institutional  needs  of  the  State,  however,  are  so  impera- 
tive and  our  duty  to  those  whose  care  we  have  undertaken  out  of 
feelings  of  humanity  and  for  the  public  good,  is  so  clear  and  in- 
sistent that  I  am  impressed  with  the  belief  that  an  act  should  be 


125 

passed  by  you  during  the  present  session  transferring  the  sinking 
fund  to  be  derived  from  the  3-cent  levy  for  the  year  1908  and  com- 
ing into  the  treasury  in  June  and  December  of  the  present  calen- 
dar year,  to  the  general  fund,  that  it  may  become  available  for 
specfic  purposes.  If  this  is  done  the  sinking  fund  from  the  levy 
of  the  present  year  coming  into  the  treasury  during  the  calendar 
year  1910  will  remain  intact.  This  fund  will  aggregate  $510,000 
and  will  enable  the  incoming  administration  to  pay  $510,000  on 
the  principal  of  the  State  debt  within  a  year  after  the  same  becomes 
payable,  and  within  six  months  thereafter  the  fund  derived  from 
the  sinking  fund  levy  will  be  sufficient  to  retire  every  dollar  of  the 
debt  and  leave  the  State  absolutely  unincumbered,  except  a  nominal 
sum  on  account  of  certain  university  bonds,  which  are  really  due  to 
itself. 

TRANSFER   OF   SINKING   FUND    LEVY. 

In  my  message  to  the  Sixty-fifth  General  Assembly  I  recom- 
mended the  transfer  of  the  sinking  fund  levy  for  the  year  1908  to 
the  general  fund,  foreseeing  the  present  necessity,  and  the  General 
Assembly  passed  a  bill  for  that  purpose  on  the  eve  of  adjournment, 
which  I  was  compelled  to  veto  because  of  an  error  in  naming  the 
year  for  which  the  transfer  was  made. 

The  transfer  of  this  fund  will  enable  us  to  complete  the  South- 
eastern Hospital  for  the  Insane  and  the  School  for  the  Deaf,  and 
to  make  needed  improvements  and  additions  at  the  State  Prison, 
the  Reformatory,  the  Boys'  School,  the  Girls'  School,  the  Epileptic 
Village  and  the  School  for  Feeble-Minded  Youth,  and  to  provide 
effectively  for  the  other  hospitals  for  the  insane,  and  begin  in  a 
substantial  way  the  institution  for  the  treatment  of  tuberculosis ; 
also  to  construct  and  equip  at  Purdue  University  and  at  the  State 
University  additional  buildings  somewhat  commensurate  with  their 
present  insistent  need. 

The  just  consideration  of  obligations  incurred  and  every  dic- 
tate of  duty  assumed  demands  that  these  things  be  done.  We  are 
in  a  position  to,  and  can,  if  we  will,  do  them  all  without  calling 
upon  posterity  to  pay  any  portion  of  the  cost,  and  we  can,  at  the 
same  time,  pay  the  foreign  bonded  indebtedness  of  the  State  be- 
fore the  expiration  of  the  first  two  years  of  the  incoming  adminis- 
tration. 

The  transfer  of  this  fund  as  here  suggested  will  create  a  gen- 
eral fund  somewhat  in  excess  of  the  specific  appropriations  im- 


126 

peratively  needed ;  if  so,  the  surplus  can  be  applied  to  the  pay- 
ment of  the  State  debt,  as  such  payment  may  be  lawfully  made 
from  the  general  fund. 

These  State  institutions — educational,  benevolent  and  penal- 
have  been  upon  my  conscience  every  hour  since  I  took  the  oath  of 
office  as  Governor  of  the  State,  as  few  other  things  have  been,  and 
they  will  continue  to  be  on  my  conscience  long  after  I  have  left  the 
executive  office. 

In  this  there  is  no  politics,  but  there  is  in  it  an  appeal  to  civic 
pride  and  to  humanity  that  can  not  well  be  denied  by  a  civilized 
and  Christian  people.  I  am  profoundly  impressed  with  the  convic- 
tion that  in  the  degree  you  fail  in  this,  you  will  fail  in  your  obli- 
gation to  the  people  you  represent. 

GOVERNOR'S  EMERGENCY  FUND. 

During  the  fiscal  year  ending  September  30,  1907,  there  was 
expended  from  the  Governor's  emergency  contingent  fund  the  sum 
of  $27,365.34,  less  $110.82  returned  to  the  treasury,  leaving  an 
unexpended  balance  of  $254.48.  The  expenditures  were  for  the 
following  purposes  and  in  the  following  amounts : 

Completion  and  furnishing  of  two  new  cottages  at  the  Northern  Hos- 
pital for  the  Insane  $6,150  49 

Southern  Hospital  for  the  Insane  14  01 

Maintenance  Boys'  School 3,256  21 

Maintenance  Girls'   school 3,388  87 

Maintenance  Women's    Prison    6,226  55 

Expanses  in  the  case  of  McCormick  vs.  State 1,426  65 

In  the  case  of  Samuel  Peters  11  76 

Investigation  of  Elkhart  Insurance  Company 12  75 

Investigation  of  State  Life  Insurance  Company 1,017  80 

Expense  of  tuberculosis  commission   540  15 

Expense  of  committee  investigating  Auditor's  office 145  00 

Expense  incurred  in  the  closing  of  the  Dearborn  Park  Casino  in  Lake 

county,    Indiana    816  57 

Expense  in  French  Lick  litigation   1  45 

Aid  to  flood  sufferers  under  authorization  of  special  act  of  Sixty-fifth 

General    Assembly    .' 4,457  08 

For  the  year  ending  September  30,  1908,  there  was  expended 
from  the  emergency  contingent  fund  $26,113.42,  less  $146.53  re- 
turned by  committees  having  in  charge  the  distribution  of  funds 
contributed  to  the  flood  sufferers,  leaving  an  unexpended  balance 
of  $4,033.11.  Said  expenditures  were  in  the  following  amounts 
and  for  the  following  purposes,  to  wit: 


127 

Maintenance  Boys'  School $2,743  73 

Maintenance  Girls'  School  8,944  95 

Maintenance  Women's  Prison  3,539  22 

Electric  wiring,  Soldiers'  Home  2,245  00 

Furnishing  and  equipping  two  cottages  at  the  Eastern  Hospital  for 

the  Insane  4,095  84 

Expense  in  the  prosecution  of  the  whitecap  cases  in  the  Bartholomew 

Circuit  Court 3,223  50 

Expense  in  the  disbarment  of  George  Kurtz  10  89 

Expense  in  Dearborn  Park  Casino  case  355  00 

Expense  in  French  Lick  litigation  365  48 

Expense  in  relation  to  State  lands  43  96 

Records  for  State  Finance  Board  318  00 

Expense  incurred  in  Muncie  strike  riot 8  50 

Expense  incurred  in  litigation  by  the  State  vs.  J.  O.  Henderson 219  35 

CIVIL,  AND  MILITARY  CONTINGENT  FUND. 

For  the  year  ending  September  30,  1907,  there  was  expended 
from  this  fund  the  sum  of  $1,606.90,  leaving  an  unexpended  bal- 
ance of  $7,559.74.  These  expenditures  were  in  the  following 
sums  and  for  the  following  purposes : 

Expense  incurred  in  prosecution  of  French  Lick  litigation $249  31 

Expense  in  Dearborn  Park  Casino  case 155  00 

Expense  incurred  in  the  prosecution  of  the  whitecap  cases  in  Bartholo- 
mew  county    402  23 

Expense  of  National  Guard,  account  Tell  City  strike  800  36 

For  the  year  ending  September  30,  1908,  there  was  expended 
from  the  civil  and  military  contingent  fund  the  sum  of  $7,251.87, 
leaving  an  unexpended  balance  of  $2,768.13  less  $20.00  returned 
to  the  treasury.  These  expenditures  were  made  for  the  following 
purposes  and  in  the  following  sums : 

Expense  of  National  Guard,  account  Tell  City  strike $311  83 

Expense  National  Guard  account  powder-mill  explosion  at  Fontanet, 

Ind 1,260  23 

Expense  of  National  Guard  account  of  Muncie  riot 3,119  73 

Expense  of  investigating  "Night  Rider"  depredations  in  Dearborn, 

Switzerland  and  Ohio  counties  680  00 

Expense  account  special  election  in  White,  Newton,  Starke  and  Jasper 

co-unties  21  21 

Expense  in  French  Lick  litigation  510  37 

Expense  in  the  prosecution  of  the  whitecap  cases  in  Bartholomew 

county 1,007  75 

Legal  opinion  in  Vincennes  University  bond  matter 200  00 

Expense  of  National  Guard  on  account  of  Avaline  Hotel  fire  at  Ft. 

Wayne 140  75 


128 


CLAIM    OF    ONE    HUNDRED    SIXTY-FIRST     REGIMENT. 

By  an  act  of  the  Sixty-fifth  General  Assembly  $11,674.61  was 
appropriated  to  reimburse  the  members  of  the  One  Hundred  and 
Sixty-first  Regiment,  Indiana  Volunteer  Infantry,  and  of  Com- 
panies A  and  B,  colored  infantry,  for  the  sum  paid  for  counsel 
fees  out  of  the  allowance  made  to  them  by  the  Federal  govern- 
ment. Of  this  sum  there  still  remains  a  balance  in  the  treasury  of 
$2,648.82.  Of  the  original  sum,  $35,023.86,  placed  in  the  hands 
of  the  Governor  for  distribution,  there  still  remains  undistributed 
$5,736.04.  Both  these  funds  are  being  distributed  as  rapidly  as 
the  persons  entitled  to  receive  the  same  can  be  found  and  proof  of 
their  claims  made. 

There  is  no  law  requiring  the  Governor  to  act  as  custodian  of 
this  fund,  but  I  have  distributed  it,  through  the  Adjutant-General 
of  the  State,  in  so  far  as  distribution  has  been  made,  simply  as  a 
matter  of  good-will  to  the  members  of  these  organizations,  that 
the  expense  of  distribution  might  be  saved  them.  Their  individual 
claims  are  small,  often  but  a  very  few  dollars.  The  balance  of  this 
fund,  $5,736.04,  I  shall  turn  over  to  the  succeeding  Governor,  if 
he  is  willing  to  accept  the  trust,  that  the  distribution  may  continue 
without  cost  to  the  claimants. 

The  original  fund  has  been  kept  in  bank  since  it  came  into  my 
hands,  as  a  fund  to  be  checked  against  as  distribution  was  made. 
Interest  thereon  has  been  paid  by  the  bank  at  the  rate  of  3  per 
cent,  per  annum,  amounting  in  the  aggregate  to  $812.77. 

The  appropriation  of  $11,674.61  made  by  the  General  Assem- 
bly has  made  good  the  whole  sum  allowed  by  the  general  govern- 
ment. Every  member  of  either  of  the  organizations  interested  has 
received  or  will  receive  the  full  share  of  the  whole  allowance  due  to 
him.  It  has  therefore  seemed  just  to  me  that  the  interest  accruing 
should  be  paid  into  the  State  treasury  to  reimburse  the  State  in 
part  for  the  appropriation  so  made.  The  interest  does  not  belong 
to  me.  The  claims  of  the  members  of  these  organizations  are  being 
paid  in  full  through  the  generosity  of  the  State  and  the  free  serv- 
ices of  its  officers,  without  cost  to  them  for  counsel  fee  or  even  of 
distribution.  I  have  therefor  paid  the  interest  accruing,  $812.77, 
into  the  State  treasury  for  the  use  of  the  State. 


129 


STATE    AVENUE    STREET    ASSESSMENT. 

The  purchase  price  of  that  portion  of  the  site  of  the  present 
School  for  the  Deaf,  sold  to  the  city  of  Indianapolis  during  the 
preceding  administration,  has  been  fully  paid  and  the  property 
transferred  by  deed  of  conveyance  to  the  city  of  Indianapolis. 

Prior  to  such  transfer  said  avenue,  from  Washington  street  to 
English  avenue,  was  improved  with  a  brick  roadway  and  curbing 
under  proceedings  begun  and  had  before  the  Board  of  Public 
Works  of  said  city.  The  property  sold  to  the  city  abuts  upon  this 
improvement  and  was  assessed  for  its  construction  in  the  sum  of 
$2,448.26,  which,  with  interest  accrued  thereon,  now  amounts  to 
$2,629.34. 

As  the  State  still  occupies  the  property  and  will,  of  necessity, 
continue  to  occupy  it  until  the  new  buildings  for  the  School  for  the 
Deaf  are  ready  for  occupancy,  and  the  ^improvement  was  con- 
structed and  the  assessment  levied  before  the  deed  of  conveyance 
was  executed,  it  is  just  that  the  State  should  pay  the  assessment. 
I  therefore  recommend  the  appropriation  of  a  sum  sufficient  to  pay 
principal  and  interest,  and  that  the  same  be  made  payable  to  the 
American  Construction  Company,  the  contractor  constructing  the 
improvement. 

CLAIM  OF   JOHN   R.   WARREN. 

The  contract  for  the  construction  of  the  buildings  at  the  Girls' 
School  was  awarded  to  John  R.  Warren.  Upon  the  completion  of 
said  buildings  a  claim  of  more  than  $12,000  for  extras  was  pre- 
sented by  Mr.  Warren  to  the  commission  having  in  charge  the  con- 
struction of  said  work.  This  claim  the  commission  refused  to  al- 
low, but  it  allowed  a  claim  of  $3,190.10  as  the  fair  value  of  the 
extras  which  Mr.  Warren  had  furnished  under  the  direction  of  the 
board. 

Only  the  sum  of  $481.05  remained  of  the  fund  available  for 
the  payment  of  the  cost  of  construction  of  this  institution.  A  bal- 
ance, therefore,  of  $2,709.05  still  remains  unpaid.  The  debt  is  a 
just  one,  and  an  appropriation  should  be  made  to  Mr.  Warren,  to 
be  immediately  available. 

GRAVE    OF    NANCY    HANKS    LINCOLN. 

Under  an  act  of  the  Sixty-fifth  General  Assembly  title  to  a 
small  tract  of  laud  containing  the  grave  of  Nancy  Hanks  Lincoln, 
mother  of  Abraham  Lincoln,  lias  been  acquired,  a  commission  ap- 

[9—19891] 


130 

pointed  and  steps  taken  to  beautify  the  grounds  and  preserve  the 
grave. 

The  annual  appropriation  of  $500  made  in  this  behalf  should 
be  continued. 

MORTON  MONUMENT. 

An  act  of  the  Sixty-fourth  General  Assembly,  approved  March 
25,  1905,  authorized  the  erection  of  a  monument  and  statue  to  the 
memory  of  Oliver  P.  Morton,  to  be  located  in  a  conspicuous  place 
on  the  State  House  grounds  and  appropriated  therefor  the  sum 
of  $35,000.  Under  this  act  a  commmission  was  appointed,  and 
the  plaza  at  the  east  entrance  of  the  State  House  selected  as  a  site. 
The  monument  was  erected  and  the  statue  placed  and  dedicated 
July  23,  1907.  The  statue  is  the  work  of  Mr.  Adolph  Schwartz, 
of  the  city  of  Indianapolis.  The  whole  memorial,  monument  and 
statue,  was  constructed  within  the  appropriation  made. 

T1PPECANOE    BATTLEFIELD    MONUMENT. 

Under  an  act  of  the  Sixty-fifth  General  Assembly,  and  an  act 
of  the  Federal  Congress,  authorizing  the  construction  of  a  monu- 
ment on  the  Tippecanoe  battlefield,  and  appropriating  therefor 
the  sum  of  $12,500  by  the  State  and  a  like  sum  by  the  Federal 
government,  a  beautiful  monument  of  granite  has  been  erected  on 
that  historic  field.  It  was  formally  dedicated  with  appropriate 
and  impressive  ceremonies  November  7,  1908.  Official  report  of 
the  proceedings  of  the  commission  having  in  charge  its  construction 
is  now  in  the  hands  of  the  public  printer,  and  will  shortly  be  laid 
upon  your  desks.  This  monument  was  also  constructed  within  the 
appropriation  made  by  the  two  governments. 

ANDERSONVILLE    MONUMENT, 

The  late  General  Assembly,  by  an  act  approved  March  9,  1907, 
authorized  the  construction  of  a  monument  at  Andersonville,  Ga.,  as 
a  tribute  to  the  soldiers  of  Indiana,  who  died  in  Andersonville 
prison  during  the  Civil  War,  and  appropriated  therefor  $10,000. 
On  the  26th  of  November  last  the  memorial  was  formally  dedicated 
and  turned  over  to  the  care  and  custody  of  the  Federal  govern- 
ment. The  commission  having  its  construction  in  charge  was  pe- 
culiarly fortunate  in  the  selection  of  both  design  and  material.  The 
appropriation  was  small,  but  with  it  a  monument  has  been  provided, 
the  most  appropriate  and  beautiful  so  far  erected  .-it  Andersonville. 
The  report  of  this  commission  is  in  preparation,  and  will  be  pub- 
lished at  an  early  date. 


131 


VICKSBURG    MOXUM  KXTS. 

Aii  act  of  the  Sixty-fifth  General  Assembly,  approved  March 
10,  1907,  authorized  the  construction  of  monuments  to  the  twenty- 
eight  military  organizations  from  Indiana  which  participated  in 
the  campaign  and  siege  resulting  in  the  capture  of  Vicksburg, 
July  4,  1863,  and  markers  designating  the  lines  occupied  by  such 
organizations  at  the  time  of  such  capture,  and  appropriating  $38,- 
000  therefor.  Under  this  act  sixteen  monuments  and  fifty-three 
markers  have  been  constructed  and  placed  in  position.  The  mark- 
ers are  of  granite,  and  are  of  substantial  size.  The  monuments  are 
of  the  same  material,  beautiful  in  design  and  distinctive  in  appear- 
ance. These  were  dedicated  on  December  29.  The  dedicatory 
ceremonies  were  participated  in  by  the  Governor  of  Mississippi  and 
many  of  the  people  of  Vicksburg.  The  report  of  the  proceedings 
of  the  commission  is  in  preparation  and  will  soon  be  submitted. 

The  reports  of  the  commissions  having  in  charge  the  construc- 
tion of  monuments  at  Chickamauga  and  at  Shiloh  were  published 
in  somewhat  extensive  form,  and  it  is  desirable  that  the  report  of 
this  commission  be  published  in  like  form,  giving  a  brief  history 
of  each  Indiana  organization  participating  in  the  campaign.  It  is 
estimated  that  the  publication  of  such  report  will  cost  $3,000.  The 
appropriation  of  this  sum  is  recommended. 

STATK    MKMOHIAL   AT    VICKSBURG. 

In  many  respects  the  Vicksburg  campaign  was  the  most  impor- 
tant campaign  of  the  Civil  War.  This  fact  is  widely  recognized, 
and  many  States  in  addition  to  regimental  monuments  and  markers 
have  and  are  appropriating  substantial  sums  for  the  construction 
of  State  memorials.  Pennsylvania  has  constructed  a  State  me- 
morial costing  $15,000,  New  York  $12,500,  Minnesota  $23,000, 
Mississippi  $50,000,  Illinois  $200,000,  and  Wisconsin  has  re- 
cently appropriated  $100,000.  A  beautiful  and  impressive  me- 
morial can  be  constructed  and  dedicated  for  $50,000.  A  site  there- 
for, centrally  located  and  of  commanding  position,  has  been  re- 
served by  the  national  commission,  and  I  earnestly  recommend  that 
an  appropriation  of  such  sum  be  made  by  you.  But  three  other 
States  had  more  organizations  in  the  siege  of  Vicksburg  or  in  the 
campaign  preceding  it  than  Indiana.  Her  troops  bore  the  brunt 
of  the  most  hotly  contested  battle  of  the  campaign  and  she  should 
not  be  behind  in  the  expression  of  her  appreciation  and  gratitude. 


132 


GKN.  PLEASANT  A.    HACKLEMAN, 

Gen.  Pleasant  A.  Hackleman  was  killed  in  battle  at  Corinth, 
Miss.,  October  3,  1862.  He  was  the  only  general  officer  from  In- 
diana to  fall  in  battle  during  the  Civil  War.  His  services  to  the 
State  and  the  Nation  ought  to  be  perpetuated.  His  last  message, 
"I  am  dying,  but  I  am  dying  for  my  country,"  ought  to  be  remem- 
bered by  our  people. 

I  recommend  an  appropriation  of  $35,000  for  the  construction 
of  a  monument  and  statue  to  his  memory,  to  be  located  in  Uni- 
versity Park  in  the  city  of  Indianapolis,  under  the  direction  of  a 
commission  to  be  created  and  appointed  for  that  purpose. 

PRIVATE    BANK    ACT. 

A  step  in  the  direction  of  State  supervision  and  inspection  of 
private  banks  was  taken  by  the  Sixty -fourth  General  Assembly. 
The  law  as  then  enacted  was  crude  and  ineffective.  It  was  valuable 
only  as  a  beginning. 

But  the  legislation  had  during  the  session  of  the  Sixty -fifth 
General  Assembly  was  of  more  value.  The  result  of  its  operation 
has  been  to  lessen  somewhat  the  number  of  private  banks  in  the 
State  and  to  increase  the  number  of  state  banks.  The  number  of 
private  banks  in  the  State  September  30,  1907,  was  213;  on  Sep- 
tember 30,  1908,  188,  a  decrease  of  25.  The  number  of  State 
banks  in  the  State  September  30,  1907,  was  235;  the  number 
September  30,  1908,  256 ;  an  increase  of  21. 

During  the  fiscal  year  1908  there  was  no  state  bank  failure 
within  the  State.  During  the  same  time  there  were  seven  private 
bank  failures.  One  of  these  failed  before  the  operation  of  the 
private  banking  act  providing  for  examinations  became  effective. 
The  other  six  were  closed  by  the  order  of  the  Auditor  of  State 
shortly  after  the  private  banking  act  went  into  effect,  upon  ex- 
amination made  under  its  provisions,  showing  the  banks  to  be  in- 
solvent. 

DEPOSITORY   LAW. 

The  act  of  the  late  General  Assembly  providing  depositories 
for  public  funds  has  now  been  in  operation  one  year.  In  that 
time  it  has  vindicated  in  the  most  remarkable  manner  the  claims 
made  for  it  by  its  friends  at  the  time  of  its  enactment. 

The  interest  collected  on  the  general  State  funds  for  the  cal- 
endar year  1908  aggregated  $27,201.61 ;  on  account  of  the  edu- 
cational institutional  funds,  $4,312.86;  total,  $31,514.47. 


133 

During  the  fiscal  year  ending  September  30,  1 908,  it  cost  $1  2,- 
17().2<)  to  administer  the  treasury  department,  and  $18,002.98  to 
administer  the  executive  office,  a  total  for  the  two  offices  of  $30,- 
179.27. 

It  will  be  seen  that  the  interest  accruing  to  the  State  exceeds 
the  cost  of  administering  both  the  treasury  and  executive  offices  by 
$1,335.20. 

The  result  of  the  law's  operations  in  the  several  counties  of  the 
State  is  little  less  satisfactory  than  in  the  State.  The  salaries  of 
the  treasurers  of  the  ninety-two  counties  of  the  State  aggregate 
$273,250.  Reports  from  sixty-six  of  the  ninety-two  counties  indi- 
cate that  the  interest  accruing  to  the  several  counties  will  aggregate 
$204,934,  a  sum  only  $68,316  less  than  the  aggregate  salaries  of 
the  treasurers  of  all  the  counties. 

Actual  data  from  the  sixty-six  counties  reporting  disclose  the 
fact  that  in  the  counties  of  Whitley,  Lake,  Randolph,  Morgan, 
Carroll,  Lawrence,  Warren,  Decatur,  Hamilton,  Jay,  Clay,  Fulton, 
Sullivan,  Adams,  Bartholomew,  Posey,  Starke,  Wells  and  Jasper 
the  interest  accruing  to  the  county  more  than  equaled  the  salary 
of  the  treasurer.  The  salaries  of  the  treasurers  of  these  eighteen 
counties  aggregrate  $47,450,  the  interest  collected  $59,895.92,  an 
excess  of  interest  in  the  eighteen  counties  over  treasurers'  salaries 
of  $12,445.92. 

SAVING  OF  MORE  THAN  $440,000. 

Reports  indicate  that  interest  accruing  to  the  several  towns 
and  cities  of  the  State,  civil  and  school,  and  to  the  several  town- 
ships, civil  and  school,  will  equal,  if  not  exceed,  the  interest  accru- 
ing to  the  counties,  making  a  total  saving  to  the  people  of  the  State 
of  more  than  $440,000. 

In  the  county  of  Marion  interest  on  the  county  fund  aggre- 
grated  $11,817.11,  while  the  total  interest  collected  by  the  county 
for  the  school  city  of  Indianapolis  and  from  other  sources,  exclusive 
of  townships,  equals  $17,352.39,  a  total  collection  of  $29,169.50. 

The  financial  gain  indicated  by  these  figures  is  not,  however, 
the  most  valuable  result  of  the  operation  of  this  law.  It  has  ended 
speculation  in  public  funds,  secured  their  honest  and  safe  adminis- 
tration, and  saved  weak  and  inefficient  custodians  of  such  funds 
from  embezzlement  and  dishonor. 

The  principle  embodied  in  the  law  should  be  preserved.  Expe- 
rience may  have  indicated  here  and  there  defects  in  it  of  minor 
character,  but  these  do  not  seriously  affect  its  value.  If  amenda- 


134 

torv  legislation  is  had  the  greatest  care  should  be  exercised  to  pre- 
>erve  unimpaired  every  vital  feature  of  the  law. 

The  provision  of  the  law  requiring  daily  settlements  on  the  part 
of  all  administrative  officers  of  the  State  handling  public  funds,  is 
no  less  valuable.  Its  effect  has  been  to  revolutionize  the  adminis- 
tration of  these  offices,  in  so  far  as  the  same  relates  to  public 
moneys,  and  in  connection  with  the  work  of  the  executive  account- 
ant, to  minimize  the  hazard  of  their  misappropriation  or  loss. 

THE  STATE'S  INSTITUTIONS  AND  THEIR  GROWING  NEEDS. 

The  State  institutions,  taken  as  a  whole,  have  been  most  effi- 
ciently administered.  They  have  been  kept  out  of  politics  abso- 
lutely. Character,  ability  and  fitness  alone  have  determined  every 
appointment  made  either  by  the  Executive,  by  the  several  boards, 
or  by  the  several  superintendents.  In  the  four  years  no  recom- 
mendation has  gone  from  the  Executive  to  the  members  of  any 
board  or  to  the  superintendent  of  any  institution  for  the  appoint- 
ment of  any  person.  The  Executive  has  selected  the  boards  and 
has  charged  them  with  the  responsibility  of  selecting  the  superin- 
tendents and  of  supervising  their  respective  institutions,  and  the 
superintendents  have  been  left  free  to  select  their  own  subordinates. 
Responsibility  for  the  several  boards  has  devolved  upon  the  Exec- 
utive, for  the  superintendent  upon  the  boards,  and  for  the  im- 
mediate administration  of  the  institutions  upon  the  superintend- 
ents. Few  changes  in  the  superintendents  have  occurred  during  the 
administration.  The  State  Prison,  the  Reformatory,  the  Women's 
Prison,  the  Boys'  School,  the  School  for  Feeble-MJnded  Youth, 
the  School  for  the  Deaf,  the  School  for  the  Blind,  the  Eastern 
Hospital  for  the  Insane,  the  Southern  Hospital  for  the  Insane, 
the  Central  Hospital  for  the  Insane,  and  the  Soldiers' 
Home  have  today  the  same  superintendents  they  had  at  the 
beginning  of  the  administration.  The  selection  of  the  new 
superintendent  for  the  Girls'  School  was  due  to  the  separa- 
tion of  that  institution  from  the  Women's  Prison;  while  the 
change  of  superintendents  at  the  Soldiers'  and  Sailors'  Orphans' 
Home  and  at  the  Northern  Hospital  for  the  Insane  was  due  to  the 
death  of  the  respective  superintendents  of  those  institutions.  .Both 
Dr.  Rogers  and  Colonel  Graham  died  within  the  year.  Both  were 
long  in  the  service  of  the  State  and  each  had  served  it  with  credit 
and  distinction.  Their  deaths  were  distinct  losses  to  the  Common- 
wealth. The  highest  compliment  the  present  administration  can 
pay  to  the  three  preceding  administrations  has  been  the  fact  that 


135 

the  superintendents  of  the  several  institutions  appointed  by  them, 
have  been  retained  in  their  respective  positions,  except  in  case  of 
removal  by  death,  throughout  the  life  of  the  present  administra- 
tion, because  of  exceptional  worth  and  superior  ability. 

The  act  of  the  late  General  Assembly  relative  to  the  govern- 
ment and  administration  of  the  penal,  correctional  and  benevolent 
institutions  of  the  State  and  providing  for  bipartisan  boards  of 
trustees  has  confirmed  and  established  their  nonpartisan  adminis- 
tration. The  present  system  I  believe  to  be  the  best  found  in  any 
of  the  many  States  which  I  have  visited  and  whose  institutions  I 
have  inspected.  It  ought  not  to  be  departed  from. 

MAINTENANCE    OF    STATE   INSTITUTIONS. 

The  funds  appropriated  for  the  maintenance  of  the  Boys' 
School,  the  Girls'  School  and  the  Women's  Prison  have  been  great- 
ly inadequate  for  each  of  the  last  two. fiscal  years.  For  the  year 
ending  September  30,  1907,  I  was  compelled  to  pay  out  of  the 
Governor's  emergency  contingent  fund  for  the  maintenance  of  the 
Boys'  School  $2,256.21,  for  the  maintenance  of  the  Girls'  School 
$3,388.87,  and  for  the  maintenance  of  the  Women's  Prison 
$6,226.55,  an  aggregate  expenditure  out  of  this  fund  for  main- 
tenance of  these  three  institutions  of  $11,871.63. 

For  the  year  ending  September  30,  1908,  I  was  compelled  to 
pay  out  of  this  fund  on  account  of  maintenance  of  the  Boys'  School 
$2,743.73,  for  the  Girls'  School  $8,944.95  and  for  the  Women's 
Prison  $3,539.22,  an  expenditure  from  this  fund  for  the  mainte- 
nance of  these  three  institutions  aggregating  $15,227.90.  In  ad- 
dition to  this,  appropriations  wrere  made  at  the  special  session  of 
the  General  Assembly  in  September  on  account  of  the  maintenance 
of  these  same  institutions,  as  follows :  Boys'  School,  $7,000  ;  Girls' 
School,  $8,000,  and  Women's  Prison,  $1,000,  an  aggregate  of 
$16,000. 

The  deficit  in  the  maintenance  fund  of  the  Girls'  School  for 
the  last  fiscal  year  was,  therefore,  $16,944.95,  in  the  maintenance 
fund  of  the  Boys'  School  $9,743.73  and  in  the  maintenance  fund 
of  the  Women's  Prison  $4,539.22,  an  aggregate  deficit  in  the  main- 
tenance fund  of  the  three  institutions  of  $31,227.90. 

It  is  the  imperative  duty  of  the  State  to  provide  a  sufficient 
maintenance  fund  for  these  institutions.  Appropriations  made 
therefor  should  not  be  so  deficient  in  amount  as  to  compel  the  Gov- 
ernor to  invade  I  lie  enier^encv  contiftgenl  fund  for  the  purpose 
of  their  maintenance.  The  Governor's  emergency  contingent  fund 


136 

should  be  kept  intact  to  meet  such  emergencies  as  may  be  occa- 
sioned to  the  buildings  and  equipment  of  the  State  institutions  by 
fire  or  other  accident,  and  for  other  emergency  demands  that  may 
be  made  thereon.  It  is  earnestly  insisted  that  you  make  sufficient 
provision  to  feed  the  wards  of  the  State  for  the  next  two  fiscal 
years. 

STATE    EDUCATIONAL    INSTITUTIONS. 

Long  before  any  of  us  became  in  any  degree  responsible  for 
policies  of  state,  the  people  of  Indiana,  through  their  chosen  rep- 
resentatives, entered  upon  the  policy  of  higher  education  for  her 
young  men  and  women,  through  the  establishment  of  the  State 
Normal  School,  Purdue  University  and  the  State  University.  For 
that  policy  we  are  not  responsible.  It  comes  to  us  already  estab- 
lished, with  millions  of  dollars  devoted  to  its  support.  We  have 
now  reached  a  point  in  the  development  of  all  three  of  these  in- 
stitutions where  we  must  decide  either  to  abandon  them  or  to  give 
them  such  support  in  equipment  and  maintenance  as  will  maintain 
their  dignity  and  efficiency.  The  first  alternative  is  not  to  be 
thought  of.  We  can  not  abandon  them,  nor  can  we  reduce  arbi- 
trarily the  number  of  students  attending  them,  or  close  their  doors 
to  the  multitude  of  young  men  and  women  who  are  seeking  educa- 
tion in  them.  In  1888  Indiana  University  had  an  enrollment  of 
275,  now  2,051.  Ten  years  ago  Purdue  University  had  an  enroll- 
ment of  702,  now  1,805.  Then  she  granted  158  degrees,  last  year 
328. 

MORE    SUPPORT    NECESSARY. 

This  increased  enrollment  makes  absolutely  necessary  increased 
room  and  equipment  and  increased  maintenance.  By  devotion  to 
right  ideals,  by  sacrifices  innumerable  and  by  long  and  invaluable 
service  they  have  earned  the  right  to  such  support  and  maintenance 
as  will  preserve  their  prestige  and  insure  their  further  efficiency. 
The  equipment  and  buildings  at  the  State  University  are  greatly 
insufficient,  and  those  at  Purdue  University  are  pitifully  so.  Pro- 
vision for  building  and  equipment  for  the  engineering  department 
at  the  latter  institution  is  absolutely  essential.  But  greater,  if 
possible,  than  the  lack  of  buildings  and  equipment,  is  the  lack  of 
funds  to  meet  their  current  necessities.  Indiana  is  far  behind  sur- 
rounding States  in  the  per  capita  expenditure  made  for  such  in- 
stitutions. She  is  at  the  bottom  of  a  list  which  includes  Illinois, 
Iowa,  Nebraska,  Michigan,  Kansas,  Wisconsin  and  Ohio.  The 
maintenance  funds  of  the  State  University  and  Purdue  University 


137 

combined  are  less  than  the  corresponding  funds  for  Ohio,  Michi- 
gan, Wisconsin,  Illinois  or  Iowa.  The  effect  of  our  parsimony  has 
been  to  deprive  both  universities  of  the  services  of  the  best  and 
ablest  men  they  have  had.  We  lost  these  men  to  Harvard,  Cornell, 
Virginia,  Dartmouth,  Bryn  Mawr,  Chicago,  Illinois,  Wisconsin, 
Cincinnati,  the  Naval  Academy,  California  and  Stanford. 

SHOULD  NOT  LET  GOOD  MEN  GO. 

We  ought  not  to  allow  any  first-rate  man  to  go  from  either  of 
these  universities  on  account  of  inability  to  pay  him  what  his  serv- 
ices are  worth  as  valued  by  the  management  of  the  great  institu- 
tions of  other  States.  To  let  such  men  go  for  lack  of  compensation 
is  to  the  discredit  of  the  State  and  to  the  great  misfortune  of  our 
young  men  and  women  who  turn  to  these  institutions  for  the  higher 
education  to  which  they  arc  entitled  by  a  policy  long  established 
and  maintained.  The  report  of  the  board  of  trustees  for  each  of 
these  institutions  is  before  the  legislative  institutional  committee. 
I  commend  them  to  your  most  thoughtful  consideration  and  earn- 
estly recommend  that  provision  be  made  for  buildings  and  equip- 
ment at  each  of  them  to  the  limit  of  present  resources,  and  that 
the  tax  rate  for  the  maintenance  fund  of  all  be  increased,  that  of 
Indiana  and  Purdue  by  one-half  and  that  of  the  State  Normal 
School  by  one-third.  This  will  add  to  the  maintenance  fund  of 
each  of  the  first  two  institutions  $83,000  annually,  and  to  that  of 
the  State  Normal  $41,000.  This  increase  will  not  then  be  suffi- 
cient to  maintain  them  as  similar  institutions  are  maintained  in 
other  States. 

SOUTHEASTERN    HOSPITAL   FOR   THE   INSANE. 

The  needs  of  each  of  the  hospitals  for  the  insane  are  clearly 
and  ably  set  forth  in  the  several  reports  made  by  the  trustees  of 
the  respective  hospitals  to  the  Governor  and  to  the  legislative  insti- 
tutional committee,  copies  of  all  of  which  will  be  referred  to  you 
for  your  examination  and  consideration.  While  all  of  the  demands 
made  can  not  be  met,  many  of  the  most  essential  and  urgent  ones 
can  and  ought  to  be  provided  for. 

The  crowded  condition  of  the  Central  Hospital  for  the  Insane, 
and  the  fact  that  there  are  more  than  1,100  insane  persons  in  the 
State  now  without  hospital  care  in  county  jails  and  poorhouses,  or 
dependent  upon  the  ineffective  care  of  friends,  makes  the  comple- 
tion of  the  new  Southeastern  Hospital  for  the  Insane  at  the  ear- 
liest possible  moment  an  absolute  and  imperative  necessity.  This 


138 

need  is  so  fairly  and  forcefully  presented  in  the  report  of  the  su- 
perintendent of  the  Central  Hospital  to  his  hoard  of  trustees,  and 
in  the  report  of  the  Southeastern  Hospital  commission,  prepared 
by  the  superintendent  of  the  Eastern  Hospital,  that  little  can  be 
added  thereto.  I  desire  to  commend  especially  both  these  reports 
to  your  most  sincere  and  kindly  consideration. 

CENTRAL  HOSPITAL   CROWDED. 

The  Central  Hospital,  with  a  normal  capacity  of  1,605  beds 
and  a  forced  capacity  of  1,748,  has  2,009  patients  enrolled,  and 
an  actual  attendance  of  1,850.  This  you  will  note  is  245  in  excess 
of  the  normal  capacity  and  102  in  excess  of  the  forced  capacity  of 
the  institution.  In  addition  to  this  there  are  in  the  Central  Hos- 
pital district  410  insane  persons  not  enrolled,  making  an  insane 
population  in  the  district,  in  and  out  of  the  institution,  of  814  in 
excess  of  the  Central  Hospital's  normal  capacity.  While  this  con- 
dition continues,  the  proper  classification  and  treatment  of  the  pa- 
tients is  impossible;  discipline  will  be  impaired,  and  the  individual 
care  and  treatment  to  whch  the  patients  are  entitled  will  be  pre- 
cluded. The  only  relief  that  can  be  obtained  is  the  completion  of 
the  Southeastern  Hospital  to  its  full  capacity. 

An  appropriation  of  $151,738.15,  made  immediately  available, 
is  necessary  to  complete  the  buildings  now  under  contract.  These 
will  afford  a  normal  capacity  of  750  beds.  The  appropriation  sug- 
gested will  also  provide  for  completing  mechanical  equipment  and 
tunnels  for  eleven  other  buildings  not  now  under  contract,  for  lack 
of  funds  to  build  and  equip  them,  eight  of  which  are  cottages  for 
patients.  In  the  words  of  Dr.  Smith : 

"These  are  a  necessary  part  of  the  scheme  of  classification  of  patients 
worked  out  with  the  greatest  care,  and  which  gives  this  new  hospital  one  of  its 
chief  claims  to  distinction  among  all  similar  institutions  of  its  class  in  this 
country." 

NEED   APT^LY   PRESENTED. 

The  need  of  this  institution  is  so  aptly  and  ably  presented  in 
this  report,  that  I  can  not  refrain  from  further  quotation: 

"No  one  feature  of  the  plan  of  such  institution  is,  in  the  judgment  and 
experience  of  the  specialist  in  the  care  of  the  insane,  so  essential  and  influential 
in  the  results  of  treatment  as  the  classification  of  the  patients.  Usually,  and 
scarcely  without  exception  in  similar  undertaking,  this  element  has  received 
secondary  consideration  and,  resulted,  by  haphazard  after-additions,  in  fatally 
impairing  the  classification,  and  thereby  hampering  the  methods  of  treatment, 
to  say  nothing  of  the  damage  to  the  architectural  symmetry  and  beauty  of  the 
institution,  but  here,  under  expert  advice  and  direction,  a  scientific  scheme 


139 

of  classification  has  reached  its  highest  degree  of  development  and  has  formed 
the  central  idea  from  which  the  entire  institution  has  been  evolved.  These  addi- 
tional structures  are  component  parts  of  it.  If  built  now,  they  perfect  it; 
if  omitted,  they  mar  it  forever. 

REASONS   OF    ECONOMY. 

"Moreover,  the  tunnels  and  mechanical  equipment  necessary  for  these 
omitted  structures  have  already  been  provided  for  and  built  at  considerable 
outlay.  Contrary  to  custom,  but  profiting  by  experience,  which  leads  to  the 
conviction  that  it  is  far  more  economical,  this  mechanical  equipment  was 
planned  to  have  sufficient  capacity  and  efficiency  to  meet  the  highest  require- 
ments of  a  complete  institution  as  originally  planned.  Thereby  it  was  the 
aim  to  avoid  the  frequent  additions  to  it,  which  too  often  and  unavoidably 
increase  the  cost  of  maintenance.  -Inasmuch  as  this  equipment  will  soon  be 
in  place  and  ready  for  service,  some  loss  will  be  entailed  by  increasing  the 
cost  of  maintenance  for  operation  far  below  capacity,  as  well  as  by  deteriora- 
tion from  idleness  and  neglect  in  such  parts  of  the  apparatus  as  may  be 
wholly  or  in  part  out  of  service. 

"Again,  these  additional  structures  can  never  again  be  constructed  in 
complete  conformity  with  those  now  under  way  at  such  small  cost  as  now. 
The  prices  for  building  materials  and  labor  are  reasonable,  and  with  a  con- 
tractor's organization  on  the  premises,  the  actual  cost  will  be  less  than  if  built 
by  different  contractors  from,  time  to  time,  to  say  nothing  of  the  probable 
inability  to  secure  uniform  materials. 

"The  additional  structures  will  complete  the  hospital  and  afford  it  a  normal 
capacity  of  1,100  beds  and  a  maximum  capacity  of  1,275  beds,  at  a  cost  of 
approximately  $1,331  a  bed  at  its  normal  capacity,  and  $1,144  a  bed  at  its 
maximum  capacity. 

NEEDS    OF    THE    STATED    INSANE. 

"Finally,  and  above  all  other  reasons  for  the  rounding  out  of  this  hos- 
pital by  this  additional  construction,  is  the  duty  of  the  State  toward  its 
insane  population.  The  additional  room  is  needed,  and  urgently  needed.  The 
other  four  hospitals  are  crowded  to  their  maximum  capacity;  the  county  poor- 
houses  are  overburdened;  many  are  in  jails;  many  more  are  wandering  in 
neglect  at  large;  and  still  others  are  improperly  kept  in  private  families, 
exposing  the  members,  particularly  the  little  children,  to  violence  and  baneful 
influences.  The  State  in  its  Constitution  promises  its  insane  care  and  treat- 
ment. It  should  keep  its  obligation.  It  has  no  moral  right  to  provide  for  one 

citizen  and  deny  another.     This  is  discrimination  which  can  not  be  justified. 

*     *     * 

"With  the  full  completion  of  this  hospital  by  the  additional  construction 
now  proposed  and  urged,  it  will  come  nearer  a  complete  system  of  State  care 
than  ever  before  in  its  entire  history.  *  *  * 

"When  completed  and  ready  for  occupancy  every  one  of  its  1,100  beds 
can  be  immediately  filled  by  transfers  from  the"  alarmingly  overcrowded 
("cntral  Hospital,  where  there  are  now  approximately  (JOO  patients  ready  and 
waiting,  and  from  the  counties,  by  slight  alterations  of  the  district  lines, 
without  the  development  of  one  more  case  of  insanity  within  the  State's 
borders." 


140 

The  original  contract  for  the  construction  of  the  institution 
was  awarded  to  Edwin  M.  Campfield,  lie  being  the  lowest  bidder  by 
nearly  $100,000.  The  contract  awarded  Mr.  Campfield  consisted 
of  a  positive  and  provisional  contract.  The  positive  contract  cov- 
nvd  construction  and  mechanical  equipment  as  follows:  Stand- 
pipe,  foundation  and  casing;  all  tunnels;  pumping  station;  ad- 
ministration building;  rear  center  buildings;  power-house,  laun- 
dry; store;  mechanical  equipment,  including  the  power  equip- 
ment, low  pressure  mains  and  returns ;  steam  heating  and  ventila- 
tion ;  water  supply  and  iron  tower ;  the  electric  equipment  and 
wiring;  plumbing  and  tile  sewer,  excepting  so  much  of  the  heat- 
ing apparatus,  electric  wiring  and  plumbing  as  belong  to  the  build- 
ings not  enumerated  in  the  positive  contract,  and  including  the 
cost  of  smokestack  and  hardware,  amounted  to  $508,067:49. 

The  provisional  contract  as  ratified  by  the  Sixty-fifth  General 
Assembly  provided  for  the  construction  of  twelve  cottages,  which, 
with  equipment,  supervision,  etc.,  were  to  cost  $559,377.82. 

A  FORFEITURE   OF    CONTRACT. 

Mr.  Campfield  entered  upon  the  performance  of  his  contract, 
but  on  March  11,  1908,  his  contract  was  declared  forfeited  by  the 
board,  because  of  his  utter  failure  to  comply  with  its  terms  and 
provisions,  and  the  construction  of  the  buildings  relet,  after  full 
advertisements,  to  Messrs.  Pulse  &  Porter,  May  28,  1908.  This 
contract  is  $151,738.15  in  excess  of  the  Campfield  contract.  This 
excess  occasions  the  necessity  for  the  appropriation  of  that  sum, 
to  be  made  immediately  available,  in  order  that  the  buildings  now 
under  contract  may  be  completed.  A  full  history  of  the  proceed- 
ings of  the  commission,  the  forfeiture  of  Mr.  Campfield's  con- 
tract and  the  reletting  of  the  contract  to  Messrs.  Pulse  &  Porter  is 
found  in  the  report  of  the  commission  filed  with  the  legislative  in- 
stitutional committee,  to  which  you  are  referred  for  full  and  com- 
plete information. 

The  new  contractors  have  been  prosecuting  their  work  with  en- 
ergy and  fidelity.  All  structures  under  contract  are  now  well  un- 
der way.  The  time  of  completion,  however,  has  been  necessarily 
extended  to  December,  1909. 

The  act  of  the  Sixty-fifth  General  Assembly  relating  to  the 
administration  of  the  penal,  correctional  and  charitable  institutions 
of  the  State  provides  that  the  board  of  trustees  for  this  institution 
can  not  be  appointed  until  the  hospital  is  completed.  The  urgent 


141 

necessity  for  the  opening  of  the  hospital  at  the  earliest  possible 
moment  requires  a  change  in  this  statute.  The  Governor  should  be 
authorized  to  appoint  a  board  of  trustees  immediately.  It  will  re- 
quire at  least  four  months  for  the  board  to  select  a  superintendent 
and  for  the  organization  of  the  hospital.  If  the  board  is  not  ap- 
pointed until  the  hospital  is  completed,  the  time  required  for  the 
selection  of  a  superintendent  and  the  organization  of  the  institution 
will  delay  its  opening.  Under  the  circumstances,  delay  on  such  ac- 
count is  inexcusable. 

SCHOOL    FOR    THE    DEAF. 

Under  the  preceding  administration  the  School  for  the  Deaf, 
lands  and  buildings,  was  sold  with  a  view  of  relocating  the  same. 
During  the  present  administration  a  new  site  was  purchased,  con- 
sisting of  76.93  acres,  advantageously  situated  on  Forty-second 
street,  at  a  cost  to  the  State  of  $30,772,  and  of  a  present  value  of 
$76,930. 

The  Sixty-fourth  General  Assembly  appropriated  $315,000 
for  the  purpose  of  constructing  the  new  institution,  one-third  of 
which  came  from  the  sale  of  the  old  site.  This  appropriation  was 
wholly  inadequate.  The  institution  faced  an  emergency.  Its 
present  site  was  sold.  Purchasers  were  insisting  upon  possession. 
The  old  buildings  were  in  need  of  extensive  repairs.  The  State 
could  not  well  make  such  repairs  on  property  it  did  not  own.  It 
was  absolutely  necessary  that  prompt  action  of  some  kind  be  taken. 
After  full  consideration  the  commission  decided  to  have  plans 
drawn  for  a  completed  institution,  and  to  let  a  contract  for  the 
construction  of  such  part  thereof  as  could  be  paid  from  the  limited 
appropriation  then  in  hand.  After  due  advertisement  a  contract 
was  let  for  a  schoolhouse,  a  dining  hall,  a  kitchen  bakery,  a  power- 
house, a  smokestack  and  tunnels,  and  a  provisional  contract  entered 
into  for  the  construction  of  the  other  buildings  embraced  within 
the  plans  adopted. 

The  proceedings  of  the  commission  were  reported  to  the  Sixty- 
fifth  General  Assembly,  and  an  additional  appropriation,  amount- 
ing to  $367,217,  was  made,  under  which  the  provisional  contracts 
were  changed  into  positive  contracts  for  the  construction,  in  part, 
of  boys'  dormitories,  girls'  dormitories  and  mechanical  equipment. 
All  these  buildings  are  now  under  roof  and  inclosed  from  the 
weather  and  the  work  rapidly  proceeding  toward  completion. 


142 


ADDITIONAL    APPROPRIATION. 

To  build  the  institution  as  planned  will  require  $409,370.50 
additional  appropriation.  It  is  of  the  highest  importance  that 
the  new  institution  he  made  habitable  before  the  beginning  of  the 
school  year,  next  September.  This  can  not  be  done  with  less  than 
$170,000,  which  should  be  made  immediately  available.  A  larger 
appropriation  is  needed,  but  less  than  that  indicated  will  not  make 
possible  the  removal  of  the  school  during  the  present  year.  The 
old  buildings  are  sadly  out  of  repair  and  will  be  scarcely  habitable 
for  another  winter.  Every  dollar  of  repairs  put  upon  them  is 
\vasted  money,  as  they  arc  not  the  property  of  the  State. 

Some  criticism  has  been  made  because  of  the  expense  of  the 
new  institution,  founded  upon  comparison  with  other  institutions. 
No  such  comparison  can  be  justly  made.  The  School  for  the  Deaf 
is  neither  a  hospital  nor  a  charitable  institution.  It  is  an  educa- 
tional institution.  It  lias  a  dual  nature.  Its  students  are  not  adults, 
but  children.  They  live  in  the  institution.  This  necessitates  dor- 
mitories, kitchen  bakery,  dining  hall,  storehouse  and  cold  storage, 
and  hospital  accommodations,  with  school  facilities  of  a  peculiar 
kind.  The  large  classes  usual  in  public  schools  are  not  possible. 
Close  individual  work  is  absolutely  essential  to  substantial  progress. 
Every  honest  consideration  precludes  comparison  with  any  other  in- 
stitution of  the  State,  correctional  or  charitable. 

SCHOOL  IN  THE   WIDEST  SENSE. 

The  law  provides  that  "it  shall  not  be  regarded  nor  classed  as 
a  benevolent  or  charitable  institution,  but  as  an  educational  insti- 
tution of  the  State,  conducted  wholly  as  such."  In  this  connection 
I  beg  to  submit  the  following  from  the  report  of  the  board  of  trus- 
tees: 

"The  Indiana  State  School  for  the  Deaf  is  strictly  an  educational  institu- 
tion— a  school  in  its  widest  and  best  sense — and  should  he  in  law  what  it  is  in 
fact,  a  part  of  the  common  school  system  of  the  State,  wherein  all  children 
of  the  State  too  deaf  to  be  properly  educated  in  the  public  schools  may  receive 
an  education  as  a  matter  of  right,  not  as  a  matter  of  charity.  It  is  in  no 
sense  an  asylum  for  the  deaf,  nor  a  place  of  refuge  for  those  who  can  not 
talk;  neither  is  it  a  prison,  a  reform  school,  an  almshouse,  a  children's  home, 
nor  a  hospital,  nor  should  it  be  associated  and  classed  with  such  institutions. 

"Neither  prison  nor  reform  school  methods,  nor  'home'  nor  asylum  re- 
strictions obtain  in  its  management.  With  literary,  dramatic  and  other 
societies,  and  with  athletic  associations,  those  in  attendance  constitute  a  gen- 
uine student  body  and  assist  in  governing  themselves.  They  mingle  with  the 
hearing-speaking  world  in  business  and  social  ways,  and  in  athletic  contests 
visit  high  schools  and  colleges  of  the  State.  *  *  * 


143 

"The  deaf  boys  and  girls  sent  to  the  school  are  not  deficient  in  mind 
(insane,  feeble-minded  or  imbecile),  will  or  emotion  (criminals,  or  with  crim- 
inal instincts),  nor  in  need  of  correction,  and  do  not  belong  in  the  general 
class  of  so-called  'defectives.'  They  are  here  for  the  purpose  of  receiving  an 
education  such  as  is  given  to  their  hearing-speaking  brothers  and  sisters  in 
the  public  schools.  In  fact,  it  is  the  duty  of  the  State  to  provide  for  the  deaf 
in  these  same  public  schools,  but,  because  of  economical  reasons  and  for 
their  more  thorough  instruction,  they  are  gathered  together  in  a  central 
institution. 

TRAINING    IN    SELF-SUPPORT. 

"As  students  they  are  trained  to  become  self-supporting  in  greater  or  less 
degree  after  leaving  the  institution,  by  being  required  to  become  proficient 
in  some  useful  trade  or  occupation,  or  in  the  underlying  principles  of  several 
trades  while  in  attendance.  As  good  citizens  and  taxpayers  of  the  State  they 
help  to  support  the  benevolent  and  charitable  institutions  of  the  State  for  the 
insane,  the  epileptics,  the  feeble-minded  and  others  of  penal  and  correctional 
nature.  *  *  * 

"The  general  plan  and  scheme  of  the  entire  plant  of  the  new  institution  is 
commensurate  with  the  modern  requirements  of  an  educational  institution, 
with  both  sexes  in  attendance,  with  industrial  and  literary  departments,  with 
oral  and  sign  departments,  with  kindergarten,  primary,  intermediate  and  aca- 
demic grades,  with  boys  and  girls  from  six  to  twenty-one  years  of  age,  and  the 
whole  requiring  proper  division  and  separation,  with  general  supervision,  and 
with  many,  and  especially  the  younger,  close  personal  attention.  These  things 
can  not  be  fully  and  properly  p'ut  into  execution  under  existing  conditions, 
nor  can  they  be  hi  the  future,  unless  special  and  studied  attention  is  given 
to  them  in  the  complete  plan  agreed  upon.  This  has  been  done. 

THE  SCHOOL'S  CAPACITY. 

"The  new  school  has  been  planned  with  ample  capacity  for  500  students, 
with  forced  or  crowded  capacity  for  720  students.  It  is  not  being  erected  for 
last  year,  this  year  or  for  next  year  only,  but  for  many  years  to  come.  And 
if  Indiana  is  to  do  her  bounden  duty  in  the  education  of  the  deaf  the  time  is 
not  far  distant  as  the  State's  population  increases,  when  the  forced  or 
crowded  capacity  will  be  required." 

In  1900  there  were  in  the  State  650  deaf  persons  under  twenty 
years  of  age.  Five  hundred  and  nine  totally  deaf,  141  partially 
deaf. 

If  all  the  deaf  children  in  Indiana  were  gathered  in  the  insti- 
tution, the  student  body  would  immediately  reach  five  to  six  hun- 
dred. Under  present  conditions  Indiana  is  educating  about  45  per 
cent,  of  her  deaf  mutes,  \vhile  Ohio  is  educating  50  per  cent.,  Illi- 
nois 52  per  cent.,  Michigan  71  per  cent.,  and  Wisconsin  87  per 
cent. 

The  facts  when  once  understood  will  justify  every  step  taken 
by  the  commission.  The  buildings  now  nearing  completion  are 


144 


substantial  and  beautiful  structures  and  will  be  a  credit  to  the 
State  long  after  the  cavilling  criticism  of  the  present  has  been  for- 
gotten. In  my  own  behalf  as  Governor  and  as  chairman  of  the 
board  of  construction  and  in  behalf  of  the  members  of  the  board, 
I  invite  the  most  thorough  investigation  and  inspection  of  the  acts 
of  the  board  and  of  the  buildings  themselves. 


The  Girls'  School  has  been  separated  from  the  Women's  Prison, 
and  established  at  Clermont  as  a  new  institution.  The  needs  of  this 
institution  are  set  out  in  the  report  of  the  board  of  trustees,  to 
which  you  are  respectfully  referred.  I  deem  it  important  for  the 
welfare  of  the  institution  that  an  appropriation  be  made  for  the 
purchase  of  the  twelve  acres  of  land  lying  directly  across  the  road 
therefrom.  It  is  important,  also,  that  the  law  relative  to  the  parole 
of  the  inmates  be  amended.  The  Attorney-General  has  held  that 
the  board  of  trustees  has  no  parole  authority  under  the  present 
statute.  I  have  met  the  emergency  by  extending  executive  clem- 
ency where  the  board  recommended  it,  but  the  power  to  parole 
should  be  vested  in  the  board,  and  the  policy  of  the  institution 
should  be  to  find  homes  for  the  girls  in  private  families  as  rapidly 
as  their  physical,  mental  and  moral  development  will  justify. 

VILLAGE   FOR  EPILEPTICS. 

The  Village  for  Epileptics,  the  establishment  of  which  was  au- 
thorized by  the  Sixty-fourth  General  Assembly,  was  formally 
opened  for  the  admission  of  patients  on  August  19,  1907,  and  at 
the  end  of  the  fiscal  year  five  patients  were  present.  Since  its  open- 
ing five  buildings  for  patients  have  been  erected,  furnished  and 
occupied,  and  101  patients  are  now  in  the  institution.  The  site  for 
the  village  embraces  1,244  acres  of  rich  agricultural  land,  from 
which  $4,300  were  turned  into  the  State  treasury  during  the  last 
fiscal  year.  Drainage,  fencing  and  additional  buildings  are  greatly 
needed.  Provision  should  be  made  for  horses,  wagons  and  other 
implements  in  order  that  the  highest  possible  use  be  made  of  the 
services  of  such  patients  as  are  able  to  labor.  The  pressure  for 
the  admission  of  patients  is  extreme.  I  quote  from  the  report  of 
the  trustees : 

"If  the  institution  was  now  fully  equipped  for  1,250  patients  it  could  be 
immediately  filled.  Surely  there  can  not  be  a  greater  demand  for  State  care 
for  any  class  of  unfortunates.  The  lot  of  the  epileptic,  unprovided  for,  in 
Indiana  is  a  pitiable  one.  Since  the  establishment  of  this  institution  epileptics 


145 

are  excluded  from  some  of  the  institutions  to  which  they  formerly  had  access, 
upon  the  ground  that  the  State  has  made  provision  for  them  here.  In 
answering  the  appeals  of  relatives  we  can  only  say  that  provision  has  not  yet 
been  made  for  them." 

I  commend  the  growing  needs  of  the  institution  to  your  con- 
sideration in  the  hope  that  you  will  meet  them  as  fully  as  available 
funds  will  justify. 

HOSPITAL   FOR   TUBERCULOSIS. 

The  Sixty-fifth  General  Assembly,  by  an  act  approved  March 
8,  1907,  authorized  the  purchase  of  not  less  than  500  acres  of  land 
as  site  for  a  hospital  for  the  treatment  of  tuberculosis.  •  After  much 
investigation  and  the  most  thorough  and  thoughtful  consideration 
the  commission  selected  a  site  three  miles  east  of  Rockville,  contain- 
ing 504  acres  of  land  at  a  cost  of  $24,000.  Provision  should  be 
made  for  the  beginning  of  this  institution,  and,  if  possible,  the  sum 
of  $250,000  appropriated  therefor. 

The  ravages  of  tuberculosis  are  daily  brought  home  to  our  peo- 
ple by  the  untimely  death  of  friends  and  kin.  I  bespeak  for  the 
proposition  to  found  and  equip  an  institution  for  its  prevention  and 
cure,  the  serious  consideration  its  great  importance  deserves. 

STATE  PRISON. 

The  population  in  both  the  State  Prison  and  the  State  Re- 
formatory has  increased  to  such  an  extent  as  to  tax  both  institu- 
tions beyond  their  normal  capacity.  In  the  State  Prison  260  pris- 
oners are  compelled  to  sleep  two  in  a  cell.  Both  sanitary  and  dis- 
ciplinary considerations  preclude  this.  The  cells  are  built  for  one 
prisoner,  not  for  two.  It  is  important,  therefore,  that  an  addition 
to  the  north  cellhouse  in  the  State  Prison  be  provided  at  the  ear- 
liest possible  moment.  This  will  relieve  the  crowded  condition  of 
both  institutions,  as,  under  the  law,  transfers  can  be  made  by  the 
Executive  from  the  Reformatory  to  the  prison.  I  commend  the  re- 
port of  the  board  of  trustees  to  your  kindly  consideration. 

STATE  REFORMATORY. 

A  fire  in  the  State  Reformatory,  completely  destroying  the 
foundry  building,  occurred  since  the  close  of  the  last  fiscal  year, 
making  idle  nearly  three  hundred  inmates.  The  emergency  seemed 
to  demand  the  immediate  reconstruction  of  this  building.  I,  there- 
fore, directed  the  board  of  trustees  to  proceed  at  once  with  its  re- 
[10—19891] 


146 

construction,  and  auHiori/ed  the  payment  of  a  sum  not  exceeding 
$15,000  out  of  the  Governor's  emergency  contingent  fund  there- 
for. Whatever  additional  sum  is  required  for  the  completion  of 
the  foundry  should  be  promptly  appropriated  arid  made  imme- 
diately available.  The  Governor's  emergency  contingent  fund  for 
the  present  fiscal  year  should  be  increased  $15,000  to  replace  the 
expenditure  therefrom  on  account  of  the  sum  expended  for  this 
building,  as  emergencies  during  the  year  may  arise  requiring  a 
greater  sum  to  meet  them  than  that  remaining  in  the  fund  after 
this  expenditure  is  made.  A  great  work  is  being  done  in  the  in- 
stitution. It  deserves  your  solicitous  care.  Its  needs  are  fully  set 
out  in  the  report  filed  by  its  trustees. 

NEW   PENAL,  INSTITUTION. 

I  submit  for  your  consideration  the  propriety  of  an  act  author- 
izing the  purchase  of  a  site  for  the  location  of  an  additional  penal 
institution,  and  the  appointment  of  a  commission  to  purchase  the 
same,  and  make  a  report  to  the  next  General  Assembly  of  plans  for 
the  construction  thereof  and  the  probable  cost  of  same.  In  ten  years 
the  number  of  prisoners  in  the  State  Prison  has  increased  from  782 
to  1,192,  an  increase  of  410,  or  52.42  per  cent.  The  number  of  pris- 
oners in  the  State  Reformatory  has  increased  in  ten  years  from  941 
to  1,250,  an  increase  of  309,  or  33  1-3  per  cent.  The  combined  pop- 
ulation of  the  two  institutions  has  increased  in  ten  years  from  1,723 
to  2,432,  an  increase  of  719,  or  41.72  per  cent.  AJ;  this  rate  of  in- 
crease both  the  Prison  and  the  Reformatory  will  be,  within  ten 
years,  utterly  inadequate  to  care  for  the  boys  and  men  committed 
to  them.  The  increase  in  population  is  not  due  in  any  considerable 
degree  to  an  increase  in  crime,  as  the  actual  number  of  commit- 
ments have  not  greatly  increased.  The  increase  is  not  due  so  much 
to  the  greater  number  of  commitments  as  it  is  to  the  indeterminate 
sentence  and  parole  law.  The  operation  of  this  law  has  lengthened 
the  average  term  of  service.  The  habitual  criminal  is  retained 
longer  than  under  the  old  definite  time  law,  a  result  much  to  be  de- 
sired. I  quote  Superintendent  Whittaker  on  the  proposition  here 
advanced,  with  unreserved  approval: 

ABNORMAL  PRISONERS. 

"The  new  institution  should  be  a  special  institution,  not  known  as  a  re- 
formatory or  prison;  it  should  be  constructed  in  some  agricultural  com- 
munity upon  not  less  than  2,000  acres  of  land.  To  it  every  confirmed  criminal, 
insane  criminal,  epileptic  and  degenerate  should  be  transferred  from  the 
State  Prison  and  Reformatory,  and  there,  under  humane  treatment,  should 


147 

be  kept  for  the  full  time  of  their  maximum  sentence.  *  *  *  Forty  to  50 
per  cent,  of  all  boys  and  men  who  are  today  convicted  and  sent  to  the 
Reformatory  or  State  Prison  are  abnormal  and  can  no  more  be  benefited  or 
made  to  become  good  citizens  than  the  dwarfed  and  crooked  bush  can  be 
trained  and  cultivated  into  a  straight  tree.  Subjects  that  are  abnormal  are 
to  be  pitied  and  should  be  properly  cared  for  by  the  State,  but  should  not 
be  allowed  to  mingle  and  be  classed -with  the  50  per  cent,  who  are  normal  and 
who  can  be  benefited  by  proper  discipline,  school,  trade  or  manual  instruc- 
tion. *  *  Something  must  be  done  to  relieve  our  crowded  condition. 
This  system  would  care  for  our  criminal  population  for  fifty  years  and  at 
all  times  permit  of  the  greatest  good  in  methods  of  reformation  in  our  State 
Prison  and  Reformatory." 

The  inmates  of  the  new  institution  on  such  a  farm  could  pro- 
duce all  vegetables  for  their  own  consumption  and  could  cultivate 
crops  for  the  use  of  other  State  penal  institutions  and  be  employed 
in  the  manufacture  of  road  material  and  the  making  of  roads,  and 
in  this  way  become  self-sustaining  without  their  labor  coming  into 
competition  with  that  of  free  men.  I  know  of  no  greater  business 
in  which  the  State  can  engage  than  that  of  saving  men,  and  espe- 
cially boys.  With  the  perfect  classification  made  possible  by  the 
new  institution,  thousands  of  dollars  now  wasted,  and  hundreds  of 
bo}^s  and  men  now  lost,  could  be  saved. 

SUSPENDED    SENTENCE    LAW. 

By  an  act  of  the  Sixty-fifth  General  Assembly  circuit  and  crim- 
inal courts  were  clothed  with  discretion  to  suspend  sentence  in  cer- 
tain criminal  cases  of  first  offense.  This  has  been  done  in  the  last 
two  years  in  many  instances.  The  operation  of  the  law  in  its 
present  form  is  not  satisfactory.  Sentence  is  suspended.  The  of- 
fender is  permitted  to  go.  He  does  not  report  to  either  the  super- 
intendent of  the  Reformatory  or  the  warden  of  the  Prison.  Nei- 
ther of  these  officers  is  advised  of  the  action  of  the  court.  The  de- 
fendant is  left  without  supervision.  The  court  loses  knowledge  of 
him.  He  violates  his  parole,  but  remains  unapprehended.  The 
purpose  of  the  law  is  an  excellent  one,  but  it  should  be  so  amended 
as  to  require  the  clerk  of  every  circuit  or  criminal  court  within 
five  days  after  the  suspension  of  sentence  in  any  case,  to  advise  the 
superintendent  of  the  Reformatory  or  the  warden  of  the  Prison,  as 
the  age  of  the  defendant  shall  indicate,  of  the  fact  of  conviction, 
the  name  of  the  defendant  and  the  terms  of  the  parole,  so  that  the 
Reformatory  or  Prison  authorities  may  have  some  opportunity  of 
visitation  and  supervision.  This  will  make  the  law  effective  and 
will  save  many  first  offenders  from  subsequent  terms  in  prison  cells. 


148 


INHERITANCE   TAX  AND  OTHER   NEW    LAWS   ADVOCATED. 

I  commend  to  your  consideration  the  enactment  of  a  law  which 
shall  provide  for  the  taxation  of  the  devolution  or  succession  of 
property  by  devise  or  inheritance. 

The  enactment  of  such  a  law  was  recommended  to  the  Sixty- 
fifty  General  Assembly.  Such  a  measure  was  introduced,  passed 
the  House,  but  failed  in  the  Senate.  I  can  not  now  do  better  than 
to  submit  to  you  the  recommendation  then  made : 

"Such  a  tax  is  levied  but  once,  and  that  at  the  time  of  the  succession  or 
devolution  of  property  inherited  or  bequeathed.  It  is  levied  at  a  time  when  it 
can  be  paid  without  hardship.  It  is  an  eminently  just  form  of  taxation.  It 
can  be  administered  with  small  expense  and  collected  with  little  friction.  In 
the  apt  words  of  another,  'It  is  collected  with  ease  and  paid  with  contentment.' 
It  in  no  way  disturbs  commercial  activities.  It  levies  tribute  upon  no  busi- 
ness or  industry.  It  enables  the  State  to  reach  much  intangible  property  which 
has  been  long  sequestered.  It  is  a  tax  which  the  beneficiary  of  the  inheritance 
can  not  shift  from  his  shoulders  to  the  backs  of  others.  Indeed,  the  tax  is 
paid  before  he  receives  the  inheritance.  The  right  to  inherit  property  or  to 
dispose  of  it  by  devise  exists  only  by  grace  of  the  State.  It  is  wholly  an 
artificial  right,  resting  solely  upon  the  authority  and  consent  of  the  State. 
In  collecting  it  the  State  simply  stops  the  inheritance  in  transmission  long 
enough  to  take  from  it  a  fair  and  just  contribution  in  exchange  for  value 
already  had  and  received  by  him  who  accumulated  it,  and  then  passes  it  on 
to  the  beneficiary.  Indeed,  its  validity  and  fairness  are  quite  generally  ad- 
mitted. No  great  fortune  is  the  sole  product  of  the  man  who  organizes  and 
directs  its  accumulation.  It  is  to  some  extent  the  product  of  the  social 
process  to  which  many  persons  contribute.  Every  honest  toiler  contributes 
something  to  it,  whatever  the  field  of  his  labor. 

STATE  ENTITLED  TO  SHARE. 

"The  mechanic,  the  farmer,  the  teacher,  the  merchant,  the  physician,  the 
lawyer,  the  minister  and  the  statesman  or  the  administrator  of  public  affairs 
whose  work  makes  for  the  progress  of  society  or  for  the  maintenance  of  the 
peace  and  order  of  the  State,  has  some  share  in  its  production.  The  State 
itself  is  but  society  organized,  and  when  the  owner  of  a  great  estate  dies,  and 
in  the  transmission  of  his  fortune  the  State  takes  toll  out  of  it,  it  takes  only 
what  is  its  own.  And  in  the  taking  of  it,  it  makes  for  the  wider  diffusion  of 
wealth  and  for  the  unity  and  solidarity  of  society.  Inheritance  tax  laws  have 
a  place  in  the  revenue  laws  of  most  modern  states.  They  are  found  in  the 
laws  of  Great  Britain,  Germany,  France,  Switzerland,  Holland,  Belgium, 
Norway,  Italy,  Russia,  Australia  and  Canada.  They  are  imposed  by  the  laws 
of  thirty-two  States  of  the  Federal  Union.  The  rate  should  be  progressive, 
increasing  with  the  value  of  the  inheritance,  and  as  to  collateral  heirs,  it 
should  run  from  5  to  25  per  cent.  In  the  following  States  the  rate  is  progres- 
sive and  is  as  indicated:  California,  iys  to  5  per  cent.;  Colorado,  3  to  6 
per  cent. ;  Illinois,  2  to  6  per  cent. ;  Iowa,  5  to  20  per  cent. ;  Nebraska,  2  to  6' 
per  cent.;  North  Carolina,  iyz  to  15  per  cent.;  South  Dakota,  2  to  4  per  cent; 


149 

/ 

Washington,  3  to  12  per  cent.;  West  Virginia,  2y2  to  7y2  per  cent.;  Wisconsin, 
iy2  to  5  per  cent.  In  the  following  States  the  rate  is  5  per  cent,  or  more: 
Arkansas,  Delaware,  Iowa,  Massachusetts,  Michigan,  Missouri,  Montana,  New 
Hampshire,  New  Jersey,  New  York,  Pennsylvania,  Tennessee,  Utah,  Vermont, 
Virginia  and  Wyoming.  In  Louisiana  it  is  10  per  cent.  Seventeen  States 
include  inheritances  to  direct  heirs  at  a  rate  running  from  1  to  5  per  cent., 
exempting  inheritances  varying  in  value  from  $2,000  to  $25,000.  In  the 
States  heretofore  named  exemptions  of  inheritances  to  collateral  heirs  are 
made  only  where  the  inheritance  is  of  nominal  value.  In  six  States  the  value 
is  less  than  $500,  in  nine  it  is  $500,  and  in  eight  no  exemption  is  made  at  all  as 
to  inheritances  to  collateral  heirs.  In  case  of  inheritances  by  direct  heirs 
$20,000  is,  in  my  judgment,  a  reasonable  exemption,  and  in  case  of  inheritances 
by  collateral  heirs  the  exemption  should  not  be  more  than  $1,000.  Thirteen 
of  the  American  States  have  enacted  revenue  laws  containing  the  principle 
of  the  collateral  inheritance  tax  within  the  last  six  years.  France  derives 
$40,000,000  a  year  from  this  source,  or  6  per  cent,  of  its  entire  national 
revenue.  Great  Britain  receives  from  this  source  $70,000,000,  or  10  per  cent, 
of  its  revenues.  In  eleven  months  of  the  year  just  past  Louisiana  received 
$86,655  from  this  tax;  Vermont,  $40,581;  Colorado,  $51,236;  Maine,  $70,000; 
Iowa,  $190,748;  Minnesota,  $159,455;  Missouri,  $212,814;  Wisconsin,  $103,917; 
Massachusetts,  $712,720;  Illinois,  in  the  two  years  last  past,  $1,376,264;  Penn- 
sylvania, in  1895,  $1,677,185. 

INDIANA   SLOW  TO  ACT. 

"The  income  from  an  inheritance  tax  is  necessarily  irregular  in  volume, 
but  $150,000  to  $200,000  is  a  conservative  estimate  of  the  annual  revenue 
such  a  law  as  that  here  recommended  will  bring  into  the  treasury  of  this 
State.  Indiana  has  been  slow  to  avail  herself  of  this  form  of  taxation.  But 
the  time  has  come  when  the  necessities  of  the  State  require  its  early  enactment. 
If  enacted  it  will  meet  the  approval  of  the  people  and  will  abundantly  justify 
the  wisdom  and  foresight  of  those  who  support  it.  It  should  be!  drawn  with 
care.  It  should  not  be  imposed  upon  property  inherited,  either  real  or  per- 
sonal, but  upon  the  succession  or  devolution  thereof.  Such  a  tax  levied  upon 
the  transmission  of  the  share  a  person  receives  from  an  estate,  though  pro- 
gressive in  character,  has  been  uniformly  upheld  by  the  courts,  the  Supreme 
Court  of  the  United  States  saying  in  a  recent  case  (Magoun  v.  Illinois  Trust 
and  Savings  Bank,  170  U.  S.  283): 

"  'The  right  to  take  property  by  devise  or  descent  is  a  creature  of  the  law 
and  not  a  natural  right — a  privilege,  and  therefore  the  authority  which  confers 
it  may  impose  conditions  upon  it.'" 

REGISTRATION  LAW. 

An  unusual  influx  of  persons  of  foreign  birth  during  the  last 
five  years  lias  raised  the  question  in  the  minds  of  thoughtful  men 
of  the  propriety  of  extending  the  time  of  their  residence  within  the 
State  before  they  shall  be  entitled  to  exercise  the  privilege  of  elect- 
ors. I  am  doubtful  as  to  the  legality  of  any  such  legislation. 

The  Constitution  of  the  State  provides : 


150 

"Kvcry  male-  of  foreign  birth,  of  the  age  of  twenty-one  years  and  upward, 
shall  have  resided  in  the  United  States  one  year,  and  shall  have  resided 
in  this  State  during  the  six  months,  and  in  the  township  sixty  days,  and  in 
the  ward  or  precinct  thirty  days,  immediately  preceding  such  election,  and 
shall  have  declared  his  intention  to  become  a  citizen  of  the  United  States, 
conformably  to  the  laws  of  the  United  States  on  the  subject  of  naturalisa- 
tion, shall  be  entitled  to  vote  in  the  township  or  precinct  where  he  may 
reside,  if  he  shall  have  been  duly  registered  according  to  law." 

The  declaration  required  by  the  Federal  statute,  and  referred 
to  in  the  section  of  the  Constitution  quoted,  is  as  follows : 

"He  (an  alien)  shall  declare  on  oath  before  the  clerk  of  any  court 
authorized  by  this  act  to  naturalize  aliens,  or  his  authorized  deputy,  in  the 
district  in  which  such  alien  resides,  two  years  at  least  prior  to  his  admission, 
and  after  he  has  reached  the  age  of  eighteen  years,  that  it  is  bona  fide  his 
intention  to  become  a  citizen  of  the  United  States,  and  to  renounce  forever 
all  allegiance  and  fidelity  to  any  foreign  prince,  potentate,  state  or  sovereignty, 
and  particularly  by  name,  to  the  prince,  potentate,  state  or  sovereignty  of 
which  the  alien  may  be  at  the  time  a  citizen  or  subject.  And  such  declaration 
shall  set  forth  the  name,  age,  occupation,  personal  description,  place  of  birth, 
last  foreign  residence  and  allegiance,  the  date  of  arrival,  the  name  of  the 
vessel,  if  any,  in  which  he  came  to  the  United  States,  and  the  present  place  of 
rsidence  in  the  United  States  of  said  alien." 

The  Federal  laws  seem  to  require  no  length  of  residence  in  the 
United  States  before  an  alien  may  declare  his  intention  to  become 
a  citizen,  and  the  Constitution  of  the  State  seems  to  provide  that 
any  male  of  foreign  birth  who  has  made  the  declaration  required 
by  the  Federal  law  and  has  lived  in  the  State  six  months,  in  the 
township  sixty  days,  and  in  the  ward  or  precinct  thirty  days  im- 
mediately preceding  an  election,  shall  be  qualified  to  vote. 

I  do  not  believe  the  General  Assembly  can  add  to  or  take  from 
the  qualifications  of  electors  named  in  the  Constitution. 

A  registration  law  prepared  with  care  to  meet  the  constitu- 
tional objection  raised  to  such  registration  legislation  as  has  here- 
tofore been  enacted,  would  go  far  toward  curbing  the  evil  sought 
to  be  inhibited.  I  commend  such  a  measure  to  your  consideration. 

PRIMARY   ELECTION    LAW. 

For  four  years  I  have  watched  with  increasing  interest  the 
operation  of  primary  election  laws  in  the  different  States  enacting 
them,  and  have  become  impressed  witli  their  practicability  and 
their  benefit.  Such  laws  take  the  power  of  nomination  of  candi- 
dates for  public  office  out  of  the  hands  of  the  few  and  put  it  into 
the  hands  of  the  many,  where  it  belongs. 

I  recommend  the  enactment  of  a  law  that  will  provide  for  party 


151 

nominations  of  all  candidates   for  office,  state,  county,  municipal 
and  township,  at  primary  elections  and  at  public  expense. 

UNIFORM   SYSTEM    OF   ACCOUNTING. 

A  uniform  system  of  accounting  in  all  public  offices,  state  and 
county,  will  add  greatly  to  the  efficiency  of  the  administration  of 
fiscal  affairs,  and  should  be  provided  for  by  you  before  you  ad- 
journ. 

Inspection  of  public  offices  is  also  important,  but  care  should 
be  used  in  this  behalf,  that  the  machinery  provided  shall  be  as  in- 
expensive as  possible  to  obtain  the  results  required.  Annual  in- 
spection and  auditing  of  the  accounts  of  all  the  officers  of  the  State, 
from  the  State  government  down  to  township  offices,  will  require 
an  army  of  inspectors  and  accountants,  and  will  involve  an  expendi- 
ture wholly  unjustifiable.  If  provision  were  made  for  the  exami- 
nation of  county,  city,  town  and  township  offices  under  the  direc- 
tion of  a  State  accountant,  upon  the  request  of  a  fixed  number  of 
the  taxpayers  of  either  county,  city,  town  or  township,  made  in 
writing  and  filed  with  the  Governor,  the  expense  incurred  would 
be  greatly  lessened  and  the  law  quite  as  effective. 

The  executive  accountant  provided  for  by  the  Sixty-fifth  Gen- 
eral Assembly  has  proved  of  great  value  in  the  discovery  and  cor- 
rection of  inefficient  bookkeeping  in  the  institutions  of  the  State 
and  of  loss  of  funds  due  to  carelessness  or  neglect.  Unless  a  gen- 
eral system  of  State  accounting  shall  be  provided  for,  the  office 
of  executive  accountant  should  be  continued.  Such  an  officer  dur- 
ing the  last  twenty  years  would  have  saved  the  State  hundreds  of 
thousands  of  dollars,  and  the  reputation  of  a  number  of  men  who 
have  held  high  office  in  the  administration  of  its  affairs. 

PUBLIC  UTILITIES  LAW. 

I  do  not  urge  the  enactment  of  a  public  utilities  law,  but  if  such 
a  law  is  enacted  it  should  be  done  by  amending  the  present  Rail- 
road Commission  law,  extending  the  jurisdiction  of  the  present 
commission  to  include  public  utilities,  its  authority  in  that  behalf 
being  carefully  defined,  and  the  machinery  for  its  execution  sup- 
plied. 

EXECUTIVE   MANSION. 

The  State  of  Indiana  has  reached  a  position  in  population,  in 
wealth  and  in  greatness  to  justify  an  executive  mansion.  It  would 
add  to  tl*e  dignity  of  the  executive  office  and  immeasurably  to  the 


152 

comfort  of  the  Executive  and  his  family  and  to  the  social  enjoy- 
ment and  privileges  of  the  people. 

It  is  not  in  keeping  with  the  dignity  of  the  office  or  of  our  peo- 
ple that  a  man  elected  to  the  high  office  of  Governor  should  be 
compelled  to  become  a  seeker  for  a  home  in  rented  property.  Many 
other  States,  with  less  wealth  and  population  than  ours,  provide 
comfortable  homes  for  their  Governors  during  their  official  terms. 
An  incoming  Governor,  for  reasons  of  delicacy  rising  out  of  his 
personal  interest,  is  deterred  from  making  any  recommendation 
for  such  a  departure  from  existing  conditions. 

I  can  now  urge  an  appropriation  for  this  purpose  without  fear 
of  being  charged  with  selfish  interest.  I  hope  a  sum  of  not  less 
than  $75,000  will  be  provided  by  you  either  for  the  construction 
or  the  purchase  of  such  a  house,  with  grounds  sufficient  and  of  a 
character  to  insure  its  beauty  and  its  dignity. 

ALCOHOL  AS  CAUSE  OF  CEIME  AND  DEPENDENCY. 

The  enormous  cost  of  the  army  of  the  criminal,  defective  and 
dependent  members  of  society  is  neither  appreciated  nor  under- 
stood by  those  who  do  not  give  the  subject  special  study  and  in- 
vestigation. 

The  regular  appropriations  asked  by  the  authorities  of  the 
several  hospitals  for  the  insane  for  the  next  two  years  aggregate 
$2,109,290.  The  specific  appropriations  asked  for  are  $776,530, 
making  a  total  asked  for,  for  two  years,  of  $2,885,820  on  account 
of  the  insane  alone. 

The  School  for  Feeble-Minded  Youth  and  the  Village  for  Epi- 
leptics ask,  for  the  next  two  years,  in  regular  and  specific  appro- 
priations, $641,325. 

The  penal,  reformatory  and  correctional  institutions  ask  regu- 
lar and  specific  appropriations  for  the  next  two  years  aggregat- 
ing $1,493,886. 

Making  a  total  asked  for  the  insane,  the  epileptic,  the  feeble- 
minded and  the  criminal,  for  two  years,  of  $5,021,031.00. 

To  this  should  be  added  the  cost  of  township  poor  relief,  which 
for  the  next  two  years  will  not  be  less  than  $454,609.42,  and  the 
cost  of  maintaining  the  county  poor  infirmaries  of  the  State,  which 
for  the  same  period  will  not  be  less  than  $892,862.56. 

Making  a  grand  total  demand  for  support  and  housing  of  the 
criminal,  defective  and  dependent  of  $6,368,502.98. 

The  demands  made  by  the  authorities  of  these  several  institu- 
tion represent  what  in  the  judgment  of  such  authorities  is  neces- 


153 

sary  for  the  maintenance  and  efficient  administration  of  these  in- 
stitutions. All  of  the  demands,  of  course,  will  not,  can  not,  be  met, 
but  they  fairly  represent  the  immediate  burden  laid  upon  the  pro- 
ductive, normal  and  law-abiding  citizenship  of  the  State  because 
of  the  criminal,  the  defective  and  dependent  classes  of  society. 

FUTURE  BURDEN  STILT,  GREATER. 

These  figures,  appalling  as  they  are,  do  not,  however,  ade- 
quately measure  the  demands  of  the  future  in  this  behalf,  for  near- 
ly all  these  classes  are  increasing  year  by  year. 

Ten  years  ago  the  number  of  inmates  in  the  State  Prison,  Re- 
formatory, Women's  Prison,  Girls'  School,  Boys'  School  and  in 
the  county  jails,  was  3,429;  now  it  is  4,544,  an  increase  of  1,115, 
or  32.51  per  cent. 

Ten  years  ago  there  were  3,395  in  the  hospitals  for  the  insane ; 
now  5,573,  an  increase  of  2,178  or  64.15  per  cent.,  with  more  than 
1,100  insane  persons  in  the  State  outside  of  the  hospitals  for  the 
insane  and  unprovided  for. 

In  1898  there  were  568  inmates  in  the  School  for  Feeble-Minded 
Youth ;  now  there  are  in  this  school  and  in  the  village  for  epileptics 
1,188,  an  increase  of  620,  or  more  than  100  per  cent. 

Ten  years  ago  the  total  enrollment  in  the  penal  and  charitable 
institutions  of  tfee  State  was  7,392;  now  11,305,  an  increase  of 
3,913,  or  52.93  per  cent.  Within  ten  years  an  additional  hospital 
for  the  insane  and  another  penal  institution  will  of  necessity  be 
added  to  the  present  burden  laid  upon  us. 

If  the  same  ratio  of  increase  continues  in  this  State,  the  num- 
ber of  the  criminal,  the  defective  and  the  dependent  will  be  more 
than  doubled  in  twenty  years,  and  in  thirty  years,  the  life  of  a  sin- 
gle generation,  three  times  what  it  now  is. 

ALCOHOL   THE    LEADING    CAUSE. 

Viewed  in  the  aggregate  for  a  term  of  years  it  presents  a  prob- 
lem of  profound  and  deep  concern.  To  find  its  causes,  and  point 
out  its  prevention,  would  be  a  public  benefaction  of  invaluable 
character.  Formerly  little  concern  existed  on  the  part  of  society 
as  to  the  care  of  this  army  of  the  helpless,  and  even  less  concern 
to  find  the  cause  producing  it.  Recently,  however,  it  has  chal- 
lenged the  thought  of  many  men  and  women.  Much  investigation 
has  been  made  and  much  accomplished  toward  finding  the  cause 
and  pointing  out  methods  of  *  prevention.  Personally,  I  have  be- 


154 

come  entirely  convinced  that  a  single  evil  lies  at  the  very  founda- 
tion of  the  problem  and  is  responsible  for  from  25  to  50  per  cent, 
of  all  the  crime,  insanity  and  dependency  of  the  country  together 
with  the  burdens  entailed  by  them  upon  society.  My  conclusion 
is  based  upon  personal  observation  and  investigation  made  with 
patient,  earnest  purpose  and  sincere  desire  to  find  the  truth.  It 
is  corroborated  and  supported  by  the  best  thought  and  scientific 
investigation  of  the  day. 

In  a  recently  published  article,  notable  for  care  of  preparation, 
accuracy  of  statement  and  the  wide  investigation  it  discloses,  Dr. 
Henry  Smith  Williams  sums  up  the  conclusion  as  follows : 

"Considering  the  United  States  as  a  whole,  it  is  variously  estimated  that 
from  25  to  50  per  cent,  of  all  the  insane  patients  admitted  to  the  asylums 
year  by  year  owe  their  misfortune  directly  or  indirectly  to  the  abuse  of  alcohol. 
The  statistics  of  other  countries  are  closely  similar. 

"Alcohol  must  be  held  responsible  for  about  four-fifths  of  the  anti-social 
propensities  that  make  necessary  the  huge  paraphernalia  of  police  systems, 
criminal  courts,  jails,  prisons  and  reformatories  that  constitute  so  serious 
a  blot  upon  present-day  civilization. 

ALCOHOL  AND  THE  MORAL  8ENSK. 

"Were  it  not  for  the  influence  of  alcohol  the  vast  army  of  delinquents  who 
prey  upon  society  directly  when  at  large  and  indirectly  through  cost  of 
sustenance  when  confined  in  correctional  institutions,  might  be  living  useful, 
productive  lives  as  normal  members  of  a  normal  society. 

"It  is  a  characteristic  feature  of  alcohol  to  produce  impairment  of  this 
highest  mental  faculty  (moral  sense),  while  at  the  same  time  stimulating 
various  lower  propensities  and  passions.  We  might  infer  almost  without 
argument,  therefore,  that  an  agent  which  inflames  the  passions  and  lowers 
the  moral  sense  must  make  for  the  commission  of  crime.  This  inference  as 
regards  alcohol  is  abundantly  justified  by  every -day  experience. 

"The  general  relation  between  alcohol  and  pauperism  is  everywhere  recog- 
nized, and  in  many  localities  studies  have  been  made  with  the  aim  of  determin- 
ing the  exact  share  of  alcohol  in  producing  the  gigantic  burden  of  incompe- 
tency  with  which  every  civilized  society  is  handicapped.  Investigations  made 
give  secure  warrant  for  the  belief  that  at  least  one-third  of  all  the  recog- 
nized pauperism  in  the  most  highly  civilized  communities  of  Christendom 
result  from  bodily  and  mental  inefficiency  due  to  alcoholic  indulgence. 

"It  is  fairly  demonstrable  that  as  a  minumum  estimate  about  two-fifths 
of  the  paupers  in  almshouses,  one-fourth  of  the  seekers  of  charity  outside 
almshouses,  and  almost  one-half  of  the  dependent  children  in  America  owe 
their  deplorable  condition  to  alcohol. 

"The  same  cause  is  responsible  for  the  mental  overthrow  of  fully  <»ne- 
i'ourth  of  all  the  unfortunates  who  are  sent  to  tlit-  asylums  for  the  insane; 
for  the  misfortunes  of  two-fifths  of  the  neglected  or  abandoned  children, 
:ni(l  for  the  moral  delinquency  of  at  least  half  of  I  he  convicts  in  our  prisons, 
and  not  less  than  four-fifths  of  the  inmates  of  our  jails  and  workhouses." 


155 


CONCLUSIONS    OF    COMMITTEE. 

The  conclusion  of  Dr.  Williams  is  corroborated  and  partly 
based  upon  the  findings  of  the  American  Committee  of  Fifty, 
which  recently  investigated  this  subject. 

Prof.  Henry  W.  Foreman,  secretary  of  the  committee,  writes: 

"Of  the  poverty  which  comes  under  the  view  of  the  charity  organization 
societies,  18  per  cent,  of  the  persons  studied  brought  on  their  poverty  through 
the  personal  use  of  liquors,  and  9  per  cent,  attributed  it  to  the  intemperance 
of  parents  or  others. 

"Of  the  poverty  found  in  almshouses,  37  per  cent,  can  be  traced  to  liquor, 
and  of  this  32  per  cent,  is  due  to  the  personal  habits  of  the  inmates  and  15 
per  cent,  to  the  intemperance  of  others. 

"In  cases  of  destitution  of  children  not  less  than  45  per  cent,  was  found 
to  be  due  to  the  liquor  habits  either  of  parents,  guardians  or  others. 

"Of  the  total  number  of  cases  investigated  it  appeared  that  intemperance 
figured  as  one  of  the  causes  of  crime  in  nearly  50  per  cent.  It  was,  however, 
the  first  cause  in  only  31  per  cent." 

Mr.  Koren,  statistical  expert  of  the  committee,  confirms  the 
accuracy  of  the  conclusions  of  Professor  Foreman. 

The  Massachusetts  Bureau  of  Labor  Statistics,  after  long  and 
careful  consideration,  declares  in  its  published  reports  that  39  per 
cent,  of  the  inmates  of  almshouses  are  there  because  of  personal  use 
of  liquor,  and  10  per  cent,  through  intemperate  habits  of  parents, 
guardians  or  others. 

The  conclusion  of  Dr.  Williams  as  to  the  part  alcohol  bears  in 
the  causation  of  iiisanity  is  sustained  by  Dr.  Clouston,  superin- 
tendent Royal  Edinburgh  Asylum ;  by  Dr.  Fake,  of  the  Royal 
Dundee  Asylum ;  by  Dr.  Thomas  B.  Hyslop,  a  distinguished 
British  alienist,  and  by  the  ablest  alienists  of  France,  Germany  and 
Austria. 

His  conclusion  as  to  the  part  it  bears  in  the  causation  of  crime 
is  supported  by  the  Committee  of  Fifty,  the  Massachusetts  Bu- 
reau of  Labor  Statistics,  the  Lord  Chief  Justice  of  England,  Dr. 
William  Sullivan,  Prison  Medical  Officer  of  England,  the  Rev. 
Canon  J.  W.  Horsley,  late  chaplain  of  his  majesty's  prison  at 
Clerkenwell,  and  the  best  students  of  criminology  in  France,  Ger- 
many and  Austria. 

TESTIMONY  IN  INDIANA. 

Within  the  last  few  days  I  submitted  this  article  of  Dr.  Wil- 
liams to  the  superintendents  of  the  several  hospitals  for  the  insane, 
the  School  for  Feeble-Minded  Youth,  to  the  warden  of  the  State 
Prison  and  the  superintendents  of  the  Reformatory  and  correc- 


156 

tional  institutions  of  the  State,  and  to  Mr.  Amos  W.  Butler,  secre- 
tary of  the  Hoard  of  State  Charities,  with  the  request  that  they 
each  advise  me  as  to  how  far  their  own  observation  and  knowledge 
justified  Dr.  Williams'  conclusions.  All  have  submitted  answers  in 
writing. 

IN   THE  INSANE   HOSPITALS. 

Dr.  S.  E.  Smith,  superintendent  of  the  Eastern  Hospital  for 
the  Insane,  writes  that  the  records  of  that  institution  show  about  2 
per  cent,  of  all  patients  admitted  are  cases  of  alcoholic  insanity 
"clearly  and  directly  caused  by  the  use  of  alcohol,"  and  that  10 
per  cent,  of  all  other  cases  admitted  are  addicted  to  the  use  of 
alcohol,  and  that  the  number  whose  parents  have  a  history  of  alco- 
holism is  not  definitely  known.  This  makes  a  record  in  his  institu- 
tion of  12  per  cent.  But  in  this  estimate  no  account  is  taken  of 
the  element  of  transmissibility. 

Speaking  of  these  figures  the  doctor  writes : 

"This  is  a  conservative  statement,  as  certainly  there  are  others  in  this 
group  addicted  to  drink  in  some  degree,  but  the  history  of  it  is  either  unknown 
or  concealed." 

He  adds: 

"I  am  fully  convinced  that  alcoholic  parents  transmit  to  their  offspring 
tendencies  to  both  physical  and  mental  degeneration.  No  study  of  the  effects 
of  the  use  of  alcohol  upon  society  can  be  complete  or  fair  which  does  not 
include  the  element  of  transmissibility.  It  is  in  my  judgment  quite  as  im- 
portant as  its  direct  influence.  I  believe  alcohol  is  a  potent  factor  in  the 
etiology  of  insanity  and  nervous  disease  and  that  it  can  not  be  habitually 
used  in  any  degree  without  damage  to  some  part  of  the  human  organism.  No 
rr.ore  dangerous  doctrine  was  ever  promulgated  than  that  alcohol  is  a  food. 
The  truth  is  it  is  a  destructive  and  not  a  constructive  element." 

Dr.  George  F.  Edenharter,  superintendent  of  the  Central  Hos- 
pital for  the  Insane,  states  that  of  the  total  number  of  cases  ad- 
mitted to  that  institution  in  ten  years  5  per  cent,  are  returned 
as  due  to  alcohol.  This  takes  no  account  of  the  number  of  cases 
due  indirectly  to  its  use. 

Dr.  C.  E.  Laughlin,  Superintendent  of  the  Southern  Hospital 
for  the  Insane,  writes : 

"My  observation  and  experience  lead  me  to  the  conclusion  that,  if  we 
consider  the  immediate  and  remote  influence  exercised  by  the  various  forms 
of  alcohol  in  the  causation  of  insanity,  the  estimated  percentage  stated  by 
Dr.  "Williams  in  his  summary  is  ultra-conservative;  and  the  further  belief  that 
any  one  who  takes  an  appreciable  quantity  of  alcohol  into  his  system  assumes 


157 

thereby  a  risk  of  inflicting  an  increased  tendency  to  disease  and  crime  upon 
himself  and   his   progeny." 

Dr.  Fred  W.  Terflinger,  Superintendent  of  the  Northern  Hos- 
pital for  the  Insane,  writes: 

"Some  years  ago  Dr.  Rogers  estimated  that  two  per  cent,  of  all  male 
insane  are  so  because  of  liquor;  that  is,  their  insanity  was  due  directly  to  its 
use.  Personally,  I  am  inclined  to  think  this  estimate  is  low,  and  I  would 
place  it  at  5  to  7  per  cent.  Intemperance  as  a  cause  of  insanity  assumes  a 
much  more  important  role  indirectly  than  directly.  While  from  5  to  7  per 
cent,  reach  the  hospital  directly  because  of  chronic  alcoholism,  a  much  larger 
number,  consisting  of  wives  of  drunkards,  worried  into  a  state  of  suicidal 
depression,  because  of  the  husband's  abuse  and  failure  to  provide,  and  a  train 
of  neuropathic,  neurasthenic  and  choreic  progeny,  often  conceived  during  a 
drunken  spree,  constitute  a  percentage  which  it  is  difficult  to  correctly  esti- 
mate. On  the  whole,  I  would  be  inclined  to  say  that  my  experience  corroborates 
the  statement  of  this  author  (Dr.  Williams),  and  I  would  think  that  his 
figures  are  conservative." 

IN  SCHOOL  FOR  FEEBLE-MINDED. 

Mr.  Albert  E.  Carroll,  superintendent  of  the  School  for  Feeble- 
Minded  Youth,  writes : 

"I  have  taken  the  cases  of  100  female  epileptics  from  our  files,  in  regular 
alphabetical  order,  and  the  causation  shown  by  the  individual  paupers  as 
follows:  Alcoholism:  Father,  22;  mother,  2;  paternal  grandfather,  2;  mater- 
nal grandmother,  4;  total,  30. 

"I  also  selected  in  the  same  manner  100  male  cases  with  idiocy  and  feeble- 
mindedness present,  without  epileptic  history,  with  the  following  result: 
Alcoholism:  Father,  24;  mother,  2;  paternal  grandfather,  4;  maternal  grand- 
mother, 4;  total,  34. 

"Alcoholism  is  the  parent  of  so  many  vices  and  conditions  and  her  genera- 
tions have  multiplied  and  spread  out  until  in  many  instances  it  is  almost 
impossible  to  trace  the  lineage  to  the  original  source." 

As  to  the  conclusion  of  Dr.  Williams,  concerning  alcohol's 
share  in  the  causation  of  crime,  poverty  and  dependency,  based 
upon  the  report  of  the  Committee  of  Fifty,  Mr.  Amos  W.  Butler, 
secretary  of  the  Board  of  State  Charities,  writes: 

"The  reports  of  the  Committee  of  Fifty  on  the  liquor  problem  are  very 
interesting  and  exceedingly  valuable.  I  can  say  that  as  far  as  my  observa- 
tion goes,  they  are  the  most  accurate  information  we  have  on  that  subject. 
The  figures  given  therein  conform  to  my  observations.  In  fact,  in  part  they 
were  drawn  from  our  Indiana  institutions." 

Mr.  James  D.  Reid,  warden  of  the  State  Prison,  writes,  as  to 
that  portion  of  the  article  of  Dr.  Williams  relating  to  alcohol's 
share  in  the  causation  of  crime : 


158 

"The  article  docs  not  overstate  the  fact*  in  my  judgment,  based  on  the 
experience  I  h;ivc  IKH!  \\illi  the  criminal  classes  received  at  this  institution. 
1  believe  if  the  influence  of  alcoholics  could  be  eliminated  and  no  substitute 
found,  that  7.5  per  cent,  of  crin.e  would  not  exist." 

PRISON   STATISTICS. 

In  the  last  four  years  1,101  men  have  been  admitted  to  the  State 
Prison.  Of  these,  51  per  cent,  drank  to  excess ;  34  per  cent,  were 
moderate  drinkers ;  total,  85  per  cent.  Less  than  15  per  cent,  were 
abstainers. 

Mr.  Reid  adds : 

"This  statement  shows  the  moderate  and  excessive  drinkers,  with  a 
total  for  these  two  classes.  I  feel  that  the  majority  of  those  classed  as 
moderate  should  come  under  the  excessive  users.  It  is  next  to  impossible  to 
obtain  reliable  information  regarding  the  habits  of  the  parents,  as  few  will 
admit  that  the  father,  and  especially  the  mother,  was  a  drunkard." 

Mr.  W.  H.  Whittaker,  superintendent  of  the  Indiana  Reforma- 
tory, writes: 

"I  hereby  indorse  everything  that  is  said  by  the  writer  (Dr.  Williams). 
I  think  his  figures  are  as  near  correct  as  it  is  possible  to  give  them.  My 
experience  and  investigation  in  the  work  of  handling  criminals  has  con- 
vinced me  that  the  use  of  intoxicating  liquors,  either  directly  or  indirectly, 
is  the  cause  of  a  very  large  per  cent,  of  the  men  who  are  today  confined 
within  the  walls  of  reformatory  or  prison.  Fifty  per  cent,  of  the  fellows  in  the 
Reformatory  are  abnormal,  and  possibly  60  to  80  per  cent,  of  these  abnormal 
fellows  would  get  into  institutions  of  this  character  whether  liquor  was  sold 
to  them  or  not.  The  other  20  to  40  per  cent,  even  of  the  abnormals  in  my 
judgment,  are  here  either  directly  or  indirectly  through  the  cause  of  liquor. 
The  other  50  per  cent,  of  the  inmates  here  are  normal  subjects,  and  I  verily 
believe  that  90  per  cent,  of  the  normal  fellows  in  the  institution  are  here 
absolutely  through  the  cause  of  intoxicating  liquors.  This,  summed  up,  gives 
about  the  same  per  cent,  as  that  given  by  the  writer  of  the  McClure  Magazine 
article. 

"Out  of  the  426  fellows  received  last  year,  105  claimed  to  drink  tem- 
perately, 221  moderately  and  100  claimed  to  be  excessive  drinkers.  So  that 
every  man  received  at  the  institution  last  year  was  more  or  less  addicted  to  the 
use  of  liquors  from  his  own  statement." 

WOMEN'S  PRISON. 

Miss  Emily  Rhoades,  superintendent  of  the  Women's  Prison, 
writes : 

"I  have  had  a  personal  interview  with  each  woman  in  the  correctional 
department,  and  from  their  own  testimony  I  find  of  the  37  confined  here  at 
the  present  time,  all  but  4  were  addicted  to  the  use  of  intoxicants  and  were 
sentenced  on  that  account." 


159 


GIRLS     AND    BOYS     SCHOOLS. 

Miss  Charlotte  Dye,  superintendent  of  the  Girls'  School,  writes : 

"Our  statistics  give  but  20.77  per  cent,  of  drunken  fathers  and  5.98  per 
cent,  of  drunken  mothers,  a  much  lower  per  cent,  than  many  other  institutions 
in  our  own  and  other  countries.  I  can  not  vouch  for  the  accuracy  of  our 
statistics,  as  they  are  made  up  largely  from  statements  of  the  children  enter- 
ing the  institution.  They  often  do  not  know  the  facts,  and  are  ashamed  to 
state  all  they  do  know.  I  am  fully  convinced  that  alcoholism  is  the  chief 
cause  of  delinquency  of  children  in  Indiana.  Many  of  our  worst  girls  are  the 
offspring  of  both  drunken  parents." 

E.  E.  York,  superintendent  of  the  Boys'  School,  writes : 

"I  have  read  the  article  very  carefully,  and  wish  to  say  that  my  knowl- 
edge and  experience  are  in  accord  with  what  the  doctor  says  about  alcoholic 
stimulants  as  crime-producing  agencies.  The  percentage  of  juvenile  crime 
that  can  be  traced  to  either  the  direct  or  indirect  use  of  intoxicants  has  been 
gradually  on  the  increase  year  by  year,  according  to  statistics  as  compiled 
from  our  records,  since  April  1,  1901.  Our  statistics  for  the  fiscal  year  clos- 
ing September  30,  1908,  show  the  direct  effect  of  intoxicants  upon  admissions 
to  the  school,  as  follows:  Total  admissions,  242.  Sixty-two  boys  were  ad- 
dicted to  the  use  of  intoxicants.  Of  the  62,  32  owe  their  downfall  to  the  use 
of  intoxicants.  These  boys  were  all  under  16  years  of  age.  One  hundred  and 
twenty  were  admitted  whose  fathers  were  drunkards,  or  were  addicted  to  the 
use  of  liquors,  which  can  be  charged  against  them  as  a  direct  cause  of  their 
son's  delinquency.  Thirty  mothers  were  found  to  be  addicted  to  the  use  of 
liquors,  making  a  total  of  150  boys  out  of  242  admissions  last  year,  whose 
downfall  can  be  attributed  to  intoxicants.  Six  boys  admitted  last  year,  the 
offspring  of  drunken  parents,  are  now  in  our  feeble-minded  class.  Were 
the  true  facts  known  concerning  the  causes  which  have  contributed  to  the 
delinquency  of  so  many  boys,  I  am  sure  that  at  least  85  per  cent,  of  the  242 
admissions  could  trace  their  present  condition  to  the  effects  of  intoxicants. 

"It  appears  that  alcohol  can  be  held  responsible  for  nearly  three-fifths  of 
the  242  admissions  to  the  Indiana  Boys'  School  during  the  last  year,  based 
upon  reliable  figures  and  facts. 

JUVENILE   COURT   OBSERVATIONS. 

"We  have  gathered  our  statistics  from  records  furnished  by  Juvenile  Court 
judges,  by  probation  officers  and  from  the  boys  themselves.  We  have  found 
in  the  majority  of  cases  that  the  boys  refrain  from  divulging  information 
as  to  the  waywardntias  of  their  parents." 

Speaking  of  the  accuracy  of  the  statistics  given  in  the  article 
referred  to,  Dr.  Williams  says : 

"Let  it  be  particularly  borne  in  mind  that.  UK-  conclusions  just  presented 
as  to  the  casual  rel.Mlion  of  alcohol  to  1  he  production  of  each  of  these  abnormal 
elements  of  society  are  as  far  removed  as  possible  from  mere  sentimental 
estimates  or  pessimistic  guesses.  They  are  inductions  based  on  careful  sur 
veys  of  evidence.  Dealing  with  matters  of  great  complexity,  they  are  subject 
to  a  good  deal  of  latitude,  for  reasons  that  I  have  given;  but  they  are  suffi- 


160 

ciently  precise  to  serve  the  purpose  of  reasonably  secure  scientific  hypotheses. 
Considered  as  gages  of  the  misery  caused  by  alcohol,  our  percentages  are 
utterly  inadequate,  to  be  sure.  There  is  a  vast  host  of  victims  of  alcohol 
that  can  not  thus  be  classified.  *  *  *  They  have  no  share  in  the  estimates 
that  have  just  been  made." 

ALCOHOL'S  SHARE  IN  THE  BURDEN. 

Here,  then,  we  have,  in  terms  definite  and  certain,  enough  for 
"secure  scientific  hypotheses,"  the  cause  of  25  per  cent,  of  the  in- 
sanity, 33  per  cent,  of  the  poverty  and  pauperism  and  50  per  cent, 
of  the  crime  with  which  society  is  inflicted. 

Reduced  to  actual  figures,  alcohol's  share  in  the  burden  to  be 
laid  upon  the  people  of  Indiana  for  the  next  two  years  on  account 
of  the  insane  is  $881,786;  on  account  of  poverty  and  pauperism, 
represented  by  township  aid  and  county  infirmary  housing  and 
maintenance,  $449,157  ;  on  account  of  crime,  $726,942  ;  an  aggre- 
gate of  $2,047,885.  This  does  not  include  ministrations  to  the  poor 
by  private  persons  or  organized  charitable  societies.  Nor  does  it 
take  into  account  the  moral  element  involved. 

To  this  extent  the  cause  of  crime,  insanity  and  dependency  is 
ascertained.  The  method  of  prevention  is  obvious — remove  or  mini- 
mize the  cause.  This  you  have  the  power  to  do.  You  know  how 
to  do  it.  Posterity  will  know  that  you  knew  how,  and  if  you  leave 
to  it  this  immeasurable  burden  unlessened,  it  will  forever  censure 
you. 

COUNTY  LOCAL  OPTION   LAW. 

It  was  this  sense  of  responsibility  to  the  generations  yet  to  be, 
more  than  all  else,  that  impelled  me  to  seek  the  enactment  of  a  law 
putting  into  the  hands  of  the  people  of  the  respective  counties  of 
Indiana  the  power  to  inhibit  the  traffic  in  intoxicating  liquors.  This 
law  was  enacted  but  a  few  months  since.  It  has  been  in  effect  less 
than  sixty  days.  Three  counties  have  already  availed  themselves  of 
the  power  it  conferred  upon  their  people,  and  by  majorities  deci- 
sive and  overwhelming  have  banished  the  traffic  from  their  confines. 
Elections  have  been  ordered  in  quite  one-fourth  of  the  counties  of 
the  State.  An  enfranchised  people  at  last  have  found  opportunitv 
to  speak  effectively  upon  this  question  and  it  will  be  well  for  you 
to  stop  and  think,  long  and  seriously,  before  you  disenfranchise 
them  and  turn  loose  again  this  hateful  traffic  among  them.  All  ex- 
perience admonishes  of  the  danger  that  attends  the  disenfranchise- 
nieiit  of  a  free  people.  Neither  the  individual  nor  the  party  who 
docs  it  may  expect  continued  power  at  their  hands. 


161 

I  do  not  claim  for  this  law  that  it  will  entirely  eliminate  the 
evils  to  which  I  have  adverted,  but  I  do  claim  that  it  tends  effect- 
ively and  aggressively  in  that  direction.  The  good  that  attends  it 
will  be  accumulative.  It  will  multiply  with  the  years.  A  genera- 
tion hence,  if  the  law  be  sustained  and  the  traffic  limited  to  a  half 
dozen  counties  in  the  State,  from  whence  it  can  be  finally  driven 
entirely  from  its  borders,  its  benefits  will  be  told  in  the  story  of 
millions  of  dollars  saved  in  the  administration  of  the  penal,  re- 
formatory, correctional  and  benevolent  institutions  of  the  State,  to 
say  nothing  of  the  moral  value  of  the  men  and  women  it  will  re- 
claim. 

I  am  aware  that  there  are  some  who  have  already  celebrated  this 
law's  repeal,  but  I  beg  to  remind  all  those  who  contemplate  its  re- 
peal that  it  is  the  livest  wire  in  the  political  machinery  of  this  Com- 
monwealth, and  is  charged  with  enough  electricity  to  electrocute 
the  party  that  repeals  it. 

RESPECT  FOR  THE   LAW. 

For  four  years  there  has  been  unbroken  peace  in  Indiana.  The 
National  Guard,  except  in  camps  of  instruction,  upon  civic  occa- 
sions, or  in  case  of  fire,  explosion  or  accident,  has  been  under  arms 
but  twice,  and  was  then  used  as  prevention  rather  than  as  cure.  In 
four  years  no  shot  has  been  fired  by  any  member  of  the  Guard 
in  anger  or  to  preserve  the  peace  or  maintain  order. 

Crime  has  decreased.  This  is  especially  true  of  homicide  and  of 
all  other  crimes  involving  physical  violence.  Respect  for  the  law 
has  deepened  and  sentiment  for  its  enforcement  increased. 

Legislation,  however,  ought  to  be  enacted  giving  the  Governor 
of  the  State  greater  authority  and  providing  him  better  machinery 
for  the  enforcement  of  the  law  than  he  now  has.  Under  the  con- 
stitution he  is  charged  with  the  faithful  enforcement  of  the  law, 
but,  under  the  law  he  can  not  act  effectively  except  through  local 
officials.  He  has  no  authority  to  direct  the  action  of  any  county 
sheriff  or  prosecuting  attorney  in  any  case.  It  is  as  unjust  as  it  is 
idle  to  charge  the  Executive  with  the  enforcement  of  the  law,  and 
then  leave  him  without  effective  means  to  discharge  the  duty  im- 
posed upon  him. 

CONCLUSION. 

I  close  this  message — probably  my  ln.st  official  utterance — with 
malice  toward  no  »mn.     There  are  no  foes  that  I  desire  to  punish. 
I  go  out  of  office  with  an  intensified  love  of  the  Commonwealth  find 
[11—19891] 


162 

of  its  people.  I  have  sought  to  serve  them  in  all  things  unselfishly 
and  courageously.  Their  welfare  has  been  my  chief  concern.  The 
recommendations  I  have  made  from  time  to  time  to  successive  Gen- 
eral Assemblies,  I  have  believed  to  be  in  their  interests.  The  battles 
I  have  waged,  I  have  fought  for  them.  I  have  made  war  on  men 
only  when  they  were  inseparably  involved  with  public  questions. 
The  mistakes  I  have  made,  and  there  may  be  many,  I  have  made 
with  sincere  purpose  and  in  the  white  heat  of  zeal  for  what  I  con- 
ceived to  be  in  the  interests  of  the  people. 

The  chapter  is  about  finished.  I  will  close  it  soon  altogether 
and  submit  it  to  the  impartial  judgment  of  my  countrymen,  con- 
scious that  in  the  end  their  vision  will  be  clear  and  their  judgment 
true.  In  most  part  I  would  not  rewrite  or  change  it  if  I  could.  I 
am  content  to  let  it  stand. 

J.  FRANK  HANLY. 


163 

ADDENDA. 


Pardons,  Paroles,  Remissions   of   Fines   and   Commutations   granted   during   the 

years  1907-1908. 

February  23,   1907- 

William  A.  Spores,  commutation  of  death  sentence  to  life  im- 
prisonment in  the  Indiana  State  Prison. 

March   12,   1907- 

Thomas  O'Neil  (Marion  County  workhouse),  parole;  seriously 
ill. 

March   18,   1907— 

Cyrus  Todd  (Indiana  Reformatory),  parole  for  90  days;  in 
advanced  stage  of  tuberculosis. 

March  28,   1907- 

Constantinos  Stathocopoulas,  commutation  of  death  sentence  to 
life  imprisonment  in  the  Indiana  State  Prison. 

John  Lapadat,  commutation  of  death  sentence  to  life  imprison- 
ment in  the  Indiana  State  Prison. 

May  4,   1907- 

Harry  Limberty  (Marion  County  workhouse),  parole;    insane. 

June  3,  1907— 

George  Denny  (Marion  County  workhouse),  parole;  in  ad- 
vanced stage  of  tuberculosis. 

June  28,  1907- 

Michael  Beegler  (Indiana  Reformatory),  parole;  in  advanced 
stage  of  tuberculosis. 

July   1,  1907— 

Walter  Mosher  (Indiana  Reformatory),  parole. 

August  19,   1907— 

Harry  W.  Smith  (Indiana  Reformatory),  parole  for  15  days, 
account  of  serious  illness  of  his  father. 

August  24,   1907— 

Cyrus  Todd  (Indiana  Ref onnatory ) ,  pardon;  fatally  ill  with 
tuberculosis. 

August.  27,   1907— 

Henry   Tuckenbrook    (Indiana  Reformatory),  parole;  recom- 
mended by  the  State  Board  of  Pardons. 
Delbert  Overman  (Indiana  Reformatory),  parole. 


August   »8,  1907 

John  Stafford  (Indiana  State  Prison),  parole;  seriously  ill  with 
tuberculosis  (revoked  September  23,  1907). 

October  3,  1907— 

William  Duchane  (Marion  County  workhouse),  parole. 

October  9,  1907- 

Hazel  McMillan  (Indiana  Girls'  School),  parole. 
Ulysses  Grant  Perkins  (Indiana  Reformatory),  parole;  fatally 
ill. 

October  12,  1907— 

William  Lane  (Clark  County  jail),  remission  of  fine. 

October  19,  1907— 

Frank  Dupps  (Dubois  County  jail),  remission  of  fine. 

October  31,  1907— 

William  Burcham  (Indiana  Reformatory),  parole  for  15  days, 
account  of  serious  illness  of  his  mother. 

November  27,  1907- 

Thomas  Skinner  (State  Prison),  parole. 

Jesse  Voris  (Marion  County  workhouse),  parole. 

December  23,  1907- 

Albert  Miles  (Marion  County  workhouse),  remission  of  fine. 

December  24,  1907- 

William  WolsifFer,  pardon.  (Paroled  from  Indiana  Reforma- 
tory November  28,  1906.) 

Orlie  Costin,  pardon.  (Paroled  from  Indiana,  Reformatory 
April  17,  1906.) 

Samuel  Harmon  (State  Prison),  parole;  recommended  by 
State  Board  of  Pardons. 

Joseph  Osborne  (  State  Prison  ) ,  parole ;  recommended  by  State 
Board  of  Pardons. 

January  2,  1908— 

Harry  W.  Smith  (Indiana  Ref ormatory ) ,  parole  for  60  days, 
account  of  serious  illness  of  his  father. 

January  27,  1908— 

Thomas  Kinroy  (State  Prison),  parole. 
January  28,  1908— 

Willard  Bryant,  remission  df  fine. 


1(55 

January  29,   1908- 

George  G.  Hill,  remission  of  fine. 

January  31,   1908— 

Joseph  Flora  (Marion  County  workhouse),  parole. 

February   14,   1908— 

Louis  E.  Halpin  (Indiana  Reformatory),  parole. 

March  25,  1908— 

Otis  Wells  (Indiana  Reformatory),  parole  for  16  days,  account 
of  serious  illness  of  his  father. 

April  13,  1908— 

Daniel  A.  Hughes  (Indiana  Reformatory),  parole. 
Oliver  Lindley   (Indiana  Reformatory),  parole;    seriously   ill 
with  tuberculosis. 

April  15,  1908— 

John  Weedman  (Indiana  Reformatory),  parole  for  30  days, 
account  of  illness  of  his  wife. 

April  23,  1908— 

Nellie  Hogue  (Indiana  Girls'  School),  pardon. 
John  McGuire  (Fountain  County  jail),  parole. 

May  2,  1908— 

Leslie  L.  Miller  (Marion  County  workhouse),  parole. 

May  11,  1908— 

Ruchie  Wilson   (Indiana  Reformatory),  parole;    blind,  deaf, 

fatally  ill. 

Peter  White  (Indiana  Reformatory),  parole;  fatally  ill  with 
tuberculosis. 

June  2,  1908— 

Dercia  Wellons,  Ethel  Simmons,  Doyne  Kempf,  Margaret  Ellis, 
Nellie  Segreaves,  Bessie  Gilbert,  Hazel  Cherry,  Mae  Bowers, 
Maud  Johnson,  Lizzie  Wright,  Ada  Strange,  Lilly  Fay 
Suit,  Dora  Steele,  Susie  Jameson,  Viola  Gray,  Margaret 
Peer,  Mary  Bennett,  Ruth  Feighner,  Frances  Acton,  Hettie 
White,  Goldie  Holden,  Frances  Hall,  Bertha  Holman,  Edith 
Jones,  Mamie  Mallory,  Alma  Turk,  Edith  Edwards,  Eliza- 
beth Howell,  Jesse  Henderson,  Helen  Saunders,  Charlotte 
Willison,  Lenna  Woggerman,  Mary  Ragoshke,  Flora  Arn- 
old, Marie  Washburn,  Alice  Chandler  and  Freda  Schmuck 


1(5(5 

( Indiana  Girls1  School).  (  Paroled  upon  the  recommendation 
of  Hie  Superintendent  and  Hoard  of  Trustees  of  the  Insti- 
tution, in  order  that  they  might  he  placed  in  suitahle  homes.) 

June  2S,   1908- 

John  B.  Newton,  Charles  W.  Sparks,  and  John  B.  Cummins, 
alias  John  S.  Burris  (State  Prison),  pardoned  in  order  that 
they  might  be  delivered  to  the  agent  of  the  State  of  Ohio, 
where  they  were  under  indictment  for  the  crime  of  forgery. 

John  Biddle  and  Benjamin  Burdette  (State  Prison),  pardoned 
in  order  that  they  might  be  delivered  to  the  agent  of  the 
State  of  Illinois,  they  being  escaped  convicts  from  the  Re- 
formatory and  the  Prison  respectively,' of  said  State. 

Frank  Johnson,  alias  John  Thomas  (State  Prison),  pardoned 
in  order  that  he  might  be  delivered  to  the  agent  of  the  State 
of  Michigan,  he  being  an  escaped  convict  from  the  Jackson 
(Michigan)  Prison. 

July  7,  1908— 

Minnie  Hickman,  Gather  Wright,  Bessie  Annadel,  Mabel  Love- 
less, Beulah  Erney,  Mae  Van  Buskirk,  Hallie  Prine,  Hazel 
Bell  and  Susie  Conyers  (Indiana  Girls'  School).  (Paroled 
upon  the  recommendation  of  the  Superintendent  and  Board 
of  Trustees  of  the  Institution,  in  order  that  they  might  be 
placed  in  suitable  homes.) 

July  8,  1908— 

John  Pinter  (St.  Joseph  County  jail),  remission  of  fine. 

July  17,  1908— 

Edison  Barnhart  (Indiana  Reformatory),  pardon.  (Paroled 
June  10,  1905.) 

August  18,  1908— 

Hazel  Hummer,  Lena  Wright,  Mayme  Wilson  and  Goldie  Per- 
cival  (Indiana  Girls'  School).  (Paroled  upon  the  recom- 
mendation of  the  Superintendent  and  Board  of  Trustees 
of  the  Institution,  in  order  that  they  might  be  placed  in 
suitable  homes.) 

September  11,  1908— 

Sylvester  Anderson  (Sullivan  County  jail),  remission  of  fine. 
Markwood  Anderson  (Sullivan  County  jail),  remission  of  fine. 

September  16,  1908— 

Geoerge  Homer  (Delaware  County  jail),  parole. 


167 

September  21,   1908— 

Blaine  Reynolds  (Henry  County  jail),  remission  of  fine. 

October  27,  1908— 

John  Mclntosh  (State  Prison),  parole;  in  precarious  physical 
condition. 

November  11,   1908— 

William  Tucker  (Indiana  Reformatory),  parole;  fatally  ill 
with  tuberculosis. 

November  28,  1908— 

Eva  Buckner,  Irene  Hedges,  Pearl  Croft,  Minnie  Barnhart, 
Martha  Hupke,  Zona  Jones,  Linnie  Wilson  (Indiana  Girls' 
School).  (Paroled  upon  the  recommendation  of  the  Super- 
intendent and  Board  of  Trustees  of  the  Institution,  in  order 
that  they  might  be  placed  in  suitable  homes.) 

December  10,   1908— 

Joseph  Eacock,  pardon.  (Paroled  by  State  Prison  Parole 
Board.) 

December  19,   1908— 

H.  A.  Faulkner  (Indiana  Reformatory),  parole;  fatally  ill 
with  tuberculosis. 

December  23,   1908- 

John  Ransberger  (Indiana  Reformatory),  parole. 

'December  24,   1908— 

Thomas  Thornburg  (Indiana  State  Prison),  parole;  recom- 
mended by  State  Board  of  Pardons. 

Robert  Lane  (State  Prison),  parole;  recommended  by  State 
Board  of  Pardons. 

December  31,   1908— 

William  Flowers  (State  Prison),  parole. 


168 

Pardons,  Paroles,  Remissions  of  Fines  and  Commutations  granted  subsequent  to 

December  31,  1908. 

January  8,  1909— 

Ernest  Freeman  (State  Prison),  parole;    recommended  by  the 
State  Board  of  Pardons. 

January  9,  1909— 

Bert  Wentworth  (Indiana  Reformatory),  pardon;    fatally  ill. 
Thomas  Skinner  (State  Prison),  unconditional  pardon;  having 

faithfully  observed  parole. 
Ira  Light  (State  Prison),  parole;    recommended  by  the  State 

Board  of  Pardons. 
Charles  Gray    (State  Prison),  parole;    having  been   a  model 

prisoner.      Recommended   by   the   Judge   and   Prosecuting 

Attorney. 
Louis   Ruelle    (Reformatory),    parole;     recommended    by    the 

State  Board  of  Pardons. 


Special  Messages  to  the  Sixty-Fourth 
General  Assembly 


171 

APPOINTMENT  OF  SECRETARY. 


JANUARY  9,  1905. 

Gentlemen  of  the  Senate  and  House  of  Representatives: 

You  are  hereby  most  respectfully  notified  that  I  have  appointed 
the  Hon.  Union  B.  Hunt  as  Secretary  to  the  Governor,  and  that 
as  such  secretary  he  is  authorized  to  transmit  and  make  executive 
communication  to  the  Senate  and  the  House. 

J.  FRANK  HANLY, 

Governor. 


RESIGNATION  OF  SENATOR  FAIRBANKS. 


JANUARY  9,  1905. 

Gentlemen  of  the  Senate  and  House  of  Representatives : 

I  hereby  apprise  you  of  the  fact  that  I  have  this  day  received 
the  resignation  of  the  Honorable  Charles  Warren  Fairbanks  as  a 
Senator  of  the  United  -States  from  the  State  of  Indiana.  Such 
resignation  to  take  effect  at  the  close  of  the  Fifty-eighth  Congress, 
and  that  I  have  accepted  the  same  according  to  the  terms  thereof. 
A  vacancy  will  therefore  occur  in  the  representation  of  the  State 
in  the  Senate  of  the  United  States  on  the  4th  day  of  March  next. 

Respectfully, 

J.  FRANK  HANLY, 

Governor. 


APPOINTMENT  OF  W.  C.  VAN  ARSDEL 

A  B   MEMBER   OF   BOARD  OF   TRUSTEES   FOR    INDIANA   BOYS'    SCHOOL. 


MARCH  3,  1905. 

Mr.  President  and  Gentlemen  of  the  Senate: 

Inasmuch  as  the  statute  providing  for  the  appointment  of  the 
Board  of  Trustees  of  the  Indiana  Boys'  School  requires  that  said 
appointment  shall  be  made  by  the  Governor,  with  the  advice  and 
consent  of  the  Senate,  I  have  the  honor  to  inform  the  Senate  that 


172 

I  have  this  day  appointed  William  C.  Van  Arsdel,  of  the  city  of 
Indianapolis,  as  a  member  of  said  board,  to  serve  for  a  term  of 
four  years  from  the  first  day  of  March,  1905,  which  appointment 
is  respectfully  submitted  to  your  honorable  body  for  approval. 

J.  FRANK  HA^LY, 

Governor. 


APPOINTMENT  OF  ELLA  B.  McCOY 

As  A  MEMBER  OF  BOARD  OF  MANAGERS  FOR   INDIANA   INDUSTRIAL  SCHOOL  FOR 
GIRLS  AND  WOMEN'S   PRISON. 


MARCH  6,  1905. 

Mr.  President  and  Gentlemen  of  the  Senate: 

Inasmuch  as  the  statute  providing  for  the  appointment  of  the 
Board  of  Managers  of  the  Indiana  Industrial  School  for  Girls  and 
.Women's  Prison  requires  that  said  appointment  shall  be  made  by 
the  Governor  with  the  advice  and  consent  of  the  Senate,  I  have  the 
honor  to  inform  the  Senate  that  I  have  this  day  appointed  Ella 
B.  McCoy,  of  the  city  of  Indianapolis,  as  a  member  of  said  board, 
to  serve  for  a  term  of  four  years  from  the  first  of  March,  1905, 
which  appointment  is  respectfully  submitted  to  your  honorable 
body  for  approval. 

J.  FRANK  HANLY, 

Governor. 


FAREWELL  MESSAGE. 


MARCH  6,  1905. 

To  the  President  of  the  Senate,  the  Speaker  of  the  House  of  Rep- 
resentatives and  the  Members  and  Officers  of  the  Sixty-fourth 
General  Assembly: 

Gentlemen — The  Sixty-fourth  General  Assembly  of  the  State 
of  Indiana  is  about  to  end  by  constitutional  limitation.  In  a  few 
hours  it  will  have  gone  into  history,  there  to  be  judged  for  its  deeds 
whether  of  omission  or  commission. 

There  is  in  the  record  it  has  made  so  much  of  the  good  and  so 


173 

little  of  the  bad,  that  I  cannot  forbear  a  word  of  commendation  be- 
fore you  depart  to  take  up  again  the  duties  of  private  citizenship. 

Incessant  labor,  high  ability  and  lofty  purpose  have  character- 
ized your  services  to  the  State  throughout  the  session.  You  have 
earned  the  gratitude  of  the  people  whose  servants  you  have  in- 
deed been.  The  volume  and  the  character  of  the  legislation  jou 
have  enacted,  bespeaks  for  you  the  continued  confidence  of  your 
fellow-citizens,  without  regard  to  their  party  affiliations. 

The  measures  you  have  passed,  are  in  the  interest  of  the  peace 
and  the  repose  of  society  and  of  its  improvement  and  elevation,  as 
well  as  for  the  material  interests  of  the  Commonwealth.  Your  work 
may  contain  imperfections — it  doubtless  does — the  work  of  no  man 
or  set  of  men  can  be  expected  to  be  perfect.  Some  of  these  imper- 
fections may  not  yet  be  apparent  and  may  not  become  so  until 
tried  in  the  crucible  of  actual  experience.  In  the  main,  however, 
your  work  is  such  as  to  justify  the  partiality  of  the  people  whose 
commissions  you  have  borne. 

All  has  not  been  obtained  that  I  desired,  but  it  has  been  more 
nearly  obtained  than  is  usual  in  public  affairs.  We  have  sometimes 
differed,  but  our  differences  have  been  at  all  times  the  fearless  dif- 
ferences of  courageous,  sincere  and  honest  men,  who  were  moved 
by  a  common  impulse — a  desire  for  the  welfare  of  the  State  and 
the  happiness  of  its  people. 

Personally,  I  beg  to  thank  you,  one  and  all.  You  have  been, 
without  exception,  considerate  and  tolerant.  Of  your  kindness  I 
am  deeply  sensible,  and  in  these,  the  closing  hours  of  what  I  believe 
will  be  looked  upon  as  an  historic  session,  I  beg  to  make  grateful 
and  public  acknowledgment  thereof. 

On  the  whole,  you  have  builded  better  than  I  had  hoped,  and 
in  fact  better  than  any  General  Assembly  convened  in  the  State  in 
many  years  has  builded. 

Commending  you  to  the  considerate  judgment  of  an  apprecia- 
tive people,  and  wishing  you  safe  return  to  your  homes  and  your 
families,  I  bid  you  good-bye  with  sincerest  concern  and  desire  for 
your  future  happiness  and  for  the  prosperity  and  advancement  of 
the  people  of  Indiana. 

J.  FRANK  HANLY, 

Governor. 


Special  Messages  to  the  Sixty-Fifth 
General  Assembly 


(175) 


177 
APPOINTMENT  OF  SECRETARY, 


JANUARY  18,  1907. 

Gentlemen  of  the  Senate  and  House  of  Representatives: 

You  are  hereby  notified  that  Colonel  Fred  L.  Gemmer  has  been 
appointed  Secretary  to  the  Governor,  and  as  such  is  authorized  to 
convey  executive  messages  to  the  Senate  and  the  House. 

J.  FRANK  HANLY, 

Governor. 


FLOOD  IN  SOUTHERN  INDIANA. 


JANUARY  23,  1907. 

Gentlemen  of  the  Senate  and  House  of  Representatives: 

Southern  and  Southwestern  Indiana  has  been  visited  within  the 
week  by  a  disastrous  flood,  occasioned  by  the  overflow  of  the  Ohio 
and  Wabash  rivers.  Property  loss  is  heavy.  A  considerable  num- 
ber of  our  people  at  different  points  have  been  driven  from  their 
homes.  Some  of  them  are  destitute.  Their  needs  are  imperative. 
The  inhabitants  of  the  several  communities  affected  who  were 
spared  the  ravages  of  the  flood  have  been  quick  and  generous  in 
their  response  and  are  doing  what  they  can  to  alleviate  the  suffer- 
ing and  to  provide  for  the  immediate  necessities  of  their  unfor- 
tunate neighbors.  In  most  instances  their  efforts  have  been  suffi- 
cient, but  in  a  few  localities  local  resources  are  exhausted,  and  the 
people  are  still  in  want.  In  these  cases  the  duty  of  the  State  is 
clear.  Prompt  and  effective  measures  should  be  taken.  The  de- 
mand is  not  large,  but  the  necessities  of  the  afflicted  ones  are  as 
great  as  though  their  numbers  were  thousands. 

Believing  the  General  Assembly  will  desire  to  take  action  on 
behalf  of  the  State,  I  call  your  attention  to  the  facts  and  suggest 
the  propriety  of  a  joint  resolution  authorizing  the  Executive  to 
use  such  portion  of  the  emergency  contingent  fund  now  in  his 
hands  for  use  during  the  present  fiscal  year  as  the  present  need 
shall  require  and  authorizing  him  to  send  executive  agents  to  the 
localities  affected  that  actual  conditions  may  be  learned  and  that 
the  funds  may  not  be  wasted  or  improperly  used.  A  direct  ap- 

[12—19891] 


178 

propriation  might  be  made,  but  I  believe  the  emergency  contingent 
fund  will  be  ample  to  meet  all  present  requirements. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


BINDER  TWINE  PLANT  IN  STATE  PRISON. 


JANUARY  28,  1907. 
Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives  : 

In  compliance  with  the  request  contained  in  Engrossed  House 
Resolution  No.  8,  I  submit  herewith  information  relative  to  the  in- 
stallation, equipment  and  operation  of  the  binder  twine  plant  in  the 
State  Prison. 

Seven  items  are  included  in  said  resolution,  as  follows : 

"One.  A  complete  detailed  statement  of  money  paid  out  for 
machinery  and  installing  the  binder  twine  plant,  now  being  op- 
erated in  the  northern  prison. 

"Second.  The  statement  to  show  business  done,  for  twelve 
months  previous  ending  January  1,  1907. 

"Third.     Number  of  men  employed  in  operating  said  plant. 

"Fourth.  Number  of  pounds  of  raw  material  bought  during 
the  twelve  months. 

"Fifth.  Number  of  pounds  of  twine  sold  and  price  realized 
from  said  sale. 

"Sixth.    Amount  of  money  paid  out  for  oil,  grease  and  fuel. 

"Seventh.  Expenses  of  all  nature,  paid  out  in  connection 
with  the  manufacture  of  said  twine. 

"Eighth.  And  any  other  information  pertaining  to  the  man- 
ufacturing of  binder  twine." 

The  plant  had  not  been  in  operation  a  year  on  the  first  day  of 
January,  1907. 

Its  operation  was  not  begun  until  in  March,  1906.  It  had 
been  in  operation  on  the  first  day  of  January,  1907,  but  230 
days. 

The  figures  hereinafter  given  as  to  expense,  cost  of  manufac- 
turing and  quantity  of  output  are  therefore  based  on  230  days 
instead  of  twelve  months. 

The  expense  of  remodeling  buildings  and  installing  the  plant 
was  $2,135.75;  cost  of  machinery  and  tools,  $30,038.65;  cost 
of  plant  complete  ready  for  operation,  $32,174.40. 


179 

During  the  230  days  the  plant  lias  been  in  operation  the  av- 
erage number  of  persons  employed  therein  has  been  as  follows : 
Two  officers,  one  superintendent,  three  foremen  and  sixty-six  pris- 
oners. 

On  the  first  day  of  January,  1907,  $6,092.90  had  been  ex- 
pended for  oil,  grease,  fuel,  sacks,  asphaltum  and  other  materials 
and  for  repairs  and  for  free  labor. 

The  total  expense  for  material  and  operation  was  $185,820.24. 

This,  with  the  cost  of  establishing  the  plant,  $32,174.40,  ag- 
gregates $167,994.64,  and  is  the  total  expenditure  on  account  of 
the  plant  for  the  period  named. 

During  this  time  1,659,065  pounds  of  sisal  were  purchased,  at 
a  cost  of  $120,932.16,  and  1,697,400  pounds  of  twine  were  manu- 
factured. 

During  the  summer  of  1906,  535,945  pounds  of  twine  were 
sold,  from  which  $46,165.35  were  realized. 

On  the  first  day  of  January,  1907,  there  was  on  hand  sisal 
and  other  raw  materials  of  the  value  of  $6,458.72. 

The  late  date  at  which  the  actual  manufacture  of  twine  was 
begun  precluded  the  manufacture  of  any  considerable  quantity  of 
twine  in  time  for  the  market  for  the  harvest  of  1906. 

This  accounts  for  the  fact  that  but  535,946  pounds  were  sold 
in  that  year. 

Of  the  stock  now  on  hand,  400,000  pounds  have  been  con- 
tracted for  for  sale  to  the  Indiana  Grange,  an  organization  com- 
posed of  farmers,  at  8%  cents  per  pound  f.  o.  b.  cars  at  the 
Prison. 

A  considerable  quantity,  in  addition,  has  been  sold,  and  there 
is  little  doubt  that  the  entire  product  now  on  hand  and  all  that 
can  be  manufactured  between  now  and  harvest  time  can  be  sold 
at  the  price  named. 

On  the  first  day  of  January,  1907,  the  account  stood  as  fol- 
lows : 

Manufactured  twine  on  hand,  1,161,456  pounds,  which,  at  S1/-? 
cents  per  pound,  the  minimum  value  for  which  twine  has  been  sold 
by  the  Prison  authorities,  is  worth  $98,723.76,  f.  o.  b.  cars 
at  Prison ;  receipts  from  sales  made  last  year,  $46,165.35 ; 
sisal  and  other  materials  on  hand,  $6,458.72;  total,  $151,347.83; 
total  cost  of  operating  plant,  including  all  raw  materials  pur- 
chased, $135,820.24;  profit  to  the  State,  $15,527.79,  which,  I  sub- 
mit, is  a  remarkable  lowing  for  a  new  plant  only  230  days  in 
operation, 


180 

It  should  be  noted  that  the  profit  for  this  time  is  almost  equal 
to  fifty  per  cent,  of  the  total  cost  of  installing  the  plant. 

In  this  connection  it  is  important  also  to  remember  that  it  has 
been  necessary  to  find  a  market  and  establish  the  character  and 
value  of  the  product. 

The  quality  manufactured  is  of  the  finest  character  and  has 
given  general  satisfaction  wherever  it  has  been  used. 

It  is  equal  in  quality  to  that  manufactured  by  the  plants  op- 
erated by  private  corporations. 

The  prices  at  which  the  product  has  been  sold  has  been  as  fol- 
lows :  In  quantities  less  than  500  pounds,  9  cents ;  from  500 
pounds  to  10,000  pounds,  8%  cents;  from  10,000  pounds  up, 
8l/>  cents  f.  o.  b.  cars  at  Prison. 

The  International  Harvester  Company  controls  substantially 
the  twine  output  of  the  United  States,  except  that  manufactured 
by  state  institutions. 

Prior  to  1906  twine  sold  to  the  farmers  of  Indiana  at  from  12 
to  14  cents  per  pound.  Last  year  when  the  intention  to  manu- 
facture twine  at  the  Prison  on  State  account  was  learned,  the  price 
was  reduced  to  10  and  11  cents. 

It  is  estimated  upon  reliable  authority  that  more  than  ten  mil- 
lion pounds  of  twine  are  used  annually  by  the  farmers  of  Indiana. 

The  effect  of  a  reduction  of  I1/:}  cents  per  pound  in  cost  is  a 
saving  of  $150,000.00,  and  this  saving  was  due  very  largely  to 
the  establishment  of  the  Prison  plant. 

A  similar  plant  has  been  in  operation  in  the  Minnesota  State 
prison  for  a  number  of  years.  It  was  operated  last  year,  accord- 
ing to  the  report  of  the  warden  of  that  institution,  at  a  profit  of 
$200,000. 

A  prison  plant  is  also  in  operation  in  Missouri,  Kansas  and 
North  Dakota,  all  of  which  are  being  successfully  operated  at 
profit  to  the  State. 

In  manufacturing  binder  twine  the  State  competes  with  no  In- 
diana industry. 

Not  a  pound  of  binder  twine  is  manufactured  in  the  State 
other  than  that  manufactured  in  the  Prison. 

For  this  reason  it  interferes  less  with  free  labor  than  almost 
any  other  industry  to  which  prison  authorities  could  turn. 

It  will  result  in  a  substantial  saving  to  the  farmers  of  the 
State.  For  this  reason  labor  and  agriculture  both  favor  the  es- 
tablishment and  operation  of  the  plant. 

In  1910  the  present  Prison  labor  contracts  expire.     If  they  are 


181 

not  to  be  renewed,  it  is  of  the  greatest  importance  that  some  prep- 
aration be  made  in  advance  for  the  establishment  of  industries  in 
the  Prison  on  State  account. 

There  will  be  substantially  a  thousand  prisoners  in  the  insti- 
tution from  now  on. 

Economical  and  humanitarian  reasons  preclude  that  they 
should  remain  idle. 

As  has  been  seen,  we  have  been  able  to  employ,  during  the  last 
230  days,  an  average  of  66  prisoners  in  this  plant,  and  the  profit 
has  been  such  as  to  bring  to  the  State  more  than  90  cents  a  day  for 
each  day  they  were  employed. 

The  average  price  per  day  for  prison  contract  labor  is  about 
50  cents. 

In  November  and  December  388,025  pounds  of  twine  were 
manufactured  at  a  total  cost,  exclusive  of  prison  labor,  of  $28,- 
786.96.  Valued  at  8Vi>  cents,  the  minimum  price  for  which  the 
product  is  being  sold,  the  output  for  these  two  months  is  worth 
$32,982.12— a  profit  in  two  months  of  $4,195.16. 

This  gives  an  average  return  to  the  State  of  more  than  $1.$$ 
for  each  day  of  prison  labor  employed. 

Calculated  at  the  mean  price  for  which  the  product  is  being 
sold,  8%  cents,  the  profit  for  these  two  months  is  $5,087.00,  or  an 
average  of  $1.52  for  every  day  of  prison  labor. 

The  enterprise  was  not  entered  upon  hastily  or  without  full  and 
thorough  consideration,  nor  without  assurance  of  legal  authority 
of  the  board  to  install  and  operate  the  plant.  On  August  3,  1905, 
the  Executive  submitted  the  legal  phases  of  the  proposition  to  the 
Attorney-General,  and  was  advised  by  him  as  follows: 

"August    4,    1905. 
"Hon.  J.  Frank  Hanly,  Governor  of  Indiana: 

"Dear  Sir — Replying  to  your  communication  of  August  3,  in  which  you 
ask:  'It  is  proposed  to  establish  and  operate  in  the  Indiana  State  Prison  a 
plant  for  the  manufacture  of  binder  twine,  on  State  account.  The  warden 
and  the  members  of  the  board  of  control,  together  with  this  department,  have 
given  much  consideration  to  the  question  of  the  practicability  of  establishing 
and  operating  such  plant.  The  question  has  been  raised  as  to  whether  the 
board  of  control  possesses  the  authority  to  purchase  the  machinery,  con- 
struct the  necessary  building  for  a  warehouse,  and  purchase  the  raw  material 
from  which  to  manufacture  such  twine,  under  the  existing  law.  I  therefore 
submit  to  you  for  your  opinion  the  following  interrogatories: 

"'1.  Does  the  act  of  February  8,  189!),  authorize  the  board  of  control  of 
the  Indiana  Prison  to  purchase  the  machinery,  establish  and  operate  such 
plant,  and  construct  the  necessary  warehouse? 


is:.! 

"•.>.  Does  said  act  authorize  said  hoard  lo  purchase  the  raw  material 
from  which  to  manufacture  such  binding  twine? 

"'3.  Is  the  appropriation  provided  for  in  section  9  of  said  act,  sub- 
stantially none  of  the  same  having  been  heretofore  used,  available  for  the 
purpose  of  purchasing  the  machinery,  the  raw  material  and  of  operating 
said  plant?' 

"Section  6  of  said  act  provides  as  follows:  'It  shall  be  the  duty  of  the 
warden  to  assign  the  convicts  to  such  labor  as,  in  his  opinion,  they  are  par- 
ticularly adapted  to,  and  shall  recommend  to  the  board  of  control  from  time 
to  time  such  necessary  materials,  tools,  apparatus  or  accommodations  as  are 
needful  for  the  purpose  of  the  carrying  on  and  conducting  of  such  industries  as 
may  be  authorized  under  the  provisions  of  this  act.' 

"Section  9  provides  as  follows:  'There  is  hereby  appropriated  t->  the 
board  of  control  of  the  Indiana  State  Prison,  out  of  moneys  not  otherwise 
appropriated,  the  sum  of  $125,000,  to  be  used  by  them  in  purchasing  mate- 
rials, tools,  machinery,  apparatus  and  accommodations,  as  may  be  by  said 
board  of  control  deemed  necessary  for  the  purpose  of  establishing,  carrying 
on  and  conducting  such  trades  and  industries  as  may  be  determined  upon 
by  such  board  of  control  upon  the  public  account  system,  whereby  the  labor 
of  the  convicts  of  said  prison  shall  be  employed  only  on  its  own  account: 
Provided,  No  expenditures  shall  be  made  for  printing(,)  machinery  or  ma- 
terial.' 

"This  appropriation  is  made  contingent  on  the  adoption  by  said  board  of 
control  of  the  public  account  system,  and  the  sums  hereby  appropriated  shall 
only  be  used  to  establish,  provide  for  and  furnish  the  necessary  machinery 
and  materials  for  the  inauguration  of  such  public  account  system,  and  out  of 
said  sum  hereby  appropriated  there  shall  be  available  each  year,  beginning 
with  the  present  year,  a  sum  not  to  exceed  $25,000,  but  if  such  sum  of 
$25,000  be  not  used  by  the  said  board  of  control  in  any  one  year,  the  same 
shall  not  be  deducted  from  said  sum  of  $125,000  hereby  appropriated,  but  may 
be  drawn  and  applied  to  said  purposes  thereafter,  together  with  such  further 
sums  as  may,  at  the  ttime  or  thereafter,  become  available  for  such  use. 

"Under  the  provisions  of  this  act  it  is  my  opinion  that  the  warden  and 
the  board  of  control  of  said  Prison  have  authority  to  purchase  machinery 
and  furnish  accommodations  and  establish  and  operate  any  sort  of  a  manu- 
facturing plant  that  such  board  shall  determine  to  be  proper  and  efficient, 
and  the  provisions  of  the  act  clearly  provide  that  in  the  operation  of  such 
plant  the  board  is  authorized  to  purchase  such  materials,  apparatus  and 
appliances  as  may  be  necessary  for  any  sort  of  manufacturing  business  en- 
gaged in  and  the  appropriation  provided  for  in  section  9  may  be  used  for 
either  or  all  of  such  purposes. 

"I  have  the  honor  to  be,  very  truly  yours, 

(Signed)  "CHARLES  W.  MILLER, 

"Attorney-General." 

The  sum  appropriated  and  available  under  the  provisions  of 
the  section  cited  in  the  opinion  of  the  Attorney -General  was  in- 
sufficient to  install  and  operate  the  plant. 

After  consultation  with  the  Executive  and  the  Attorney-Gen- 
eral, and  with  their  assent,  the  board  of  control  reinvested  from 


183 

funds  derived  from  the  sale  of  binder  twine  $41,776.47  that  the 
plant  might  be  kept  in  operation  and  its  practicability  demon- 
strated. In  addition  to  this,  Warden  Keid  has  advanced,  within 
the  last  sixty  days,  out  of  his  own  personal  funds,  more  than 
$4,000.00.  He  has  done  this  voluntarily  that  he  might  be  able 
to  demonstrate  the  value  and  importance  of  the  enterprise.  His 
act  was  wholly  unselfish  and  patriotic,  and  is  in  accord  with  the 
high  service  the  warden  is  daily  giving  the  State.  By  so  doing, 
even  though  estimated  at  the  minimum  price  for  which  the  prod- 
uct of  the  plant  is  sold,  81/*  cents  per  pound,  he  made  for  the 
State,  during  the  months  of  November  and  December,  $4,195.16. 

The  bill  making  an  appropriation  for  the  future  operation  of 
the  plant,  now  pending  before  you,  carries  a  revolving  appropria- 
tion of  $200,000.00.  This  should  not  be  in  addition  to  the  money 
already  invested  in  the  plant,  in  raw  material  or  in  manufactured 
product.  The  revolving  fund  should  be  $200,000.00,  but  the  pro- 
ceeds of  the  sale  of  present  and  future  stock  in  excess  of  such 
sum  should  be  paid  into  the  treasury. 

Sisal  is  the  principal  raw  material  entering  into  the  manufac- 
ture of  binder  twine.  It  is  not  produced  in  the  United  States.  It 
must  be  purchased  in  large  quantities.  It  can  usually  be  pur- 
chased at  best  advantage  and  at  lowest  cost  in  the  months  of  Au- 
gust, September  and  October.  The  revolving  fund  should  be  large 
enough  to  permit  the  State  to  take  advantage  of  the  lowest  price 
for  the  purchase  of  sisal  in  sufficient  quantity  for  a  year's  run  of 
the  plant.  The  saving  of  a  quarter  of  a  cent  per  pound  on  sisal 
means  of  itself  a  fair  profit  to  the  State. 

Such  an  appropriation  is  not  a  straight  out  appropriation  like 
that  made  for  the  construction  of  a  building  or  the  establishment 
of  a  State  institution,  nor  is  it  ever  all  called  for  longer  than  a 
few  months  at  a  time,  after  which  it  is  returned  to  the  treasury. 

There  has  been  no  opposition  to  the  establishment  and  opera- 
tion of  this  plant  coming  to  Executive  knowledge,  except  that  in- 
spired by  the  International  Harvester  Company  people. 

This  opposition  is  due  solely  to  the  fact  that  the  manufacture 
of  binder  twine  on  State  account  will  make  it  possible  for  the 
State  to  dispute  with  them  the  Indiana  market. 

The  board  of  control,  the  warden  and  the  Executive  are  fully 
convinced  that  the  establishment  of  this  plant  and  its  operation 
under  an  appropriation  such  as  that  made  in  the  pending  measure, 
will  go  far  toward  making  the  Prison  self-sustaining. 

Every  dollar  thus  gained  is  a  dollar  taken  from  general  taxa- 


184 

tion.  It  will  give  employment  after  a  little  to  a  hundred  men  and 
will  be  a  long  step  toward  solving  the  problem  of  prison  employ- 
ment at  the  expiration  of  the  present  labor  contracts.  It  will  not 
compete  with  any  Indiana  industry. 

It  will  save  thousands  of  dollars  annually  to  the  farmers  of 
the  State.     It  is  therefore  a  matter  of  no  little  importance  and 
should  receive  thoughtful,  candid  consideration  at  your  hands. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


BABCOCK  INSURANCE  BILL. 


FEBRUARY  6,  1907. 

Gentlemen  of  the  Senate  and  House  of  Representatives : 

In  view  of  the  constitutional  obligation  imposed  upon  the  Ex- 
ecutive that  "he  shall,  from  time  to  time,  *  *  *  recommend" 
to  the  General  Assembly  "such  measures  as  he  shall  judge  to  be  ex- 
pedient," I  feel  it  to  be  my  duty  to  urge  the  passage  of  House 
Bill  No.  31,  commonly  known  as  the  "Babcock  Bill,"  the  same  be- 
ing Senate  Bill  No.  89,  commonly  known  as  the  "Farber  Bill," 
creating  a  separate  department  of  insurance,  and  providing  for 
the  appointment  of  a  commissioner  with  power  to  effectively  ad- 
minister such  department. 

This  bill  represents  the  best  thought  of  the  hour  relative  to 
the  establishment  of  a  State  Department  of  Insurance  and  the 
powers  which  should  be  conferred  thereon.  It  had,  in  the  begin- 
ning, the  careful  consideration  of  the  committee  which  recently  in- 
vestigated insurance  conditions  in  Indiana.  While  neither  of  the 
members  of  that  committee  is  an  insurance  expert,  each  is  a  man  of 
affairs,  of  clear  thought  and  of  high  and  disinterested  purpose, 
and  each  gave  substantially  a  year  to  the  investigation  of  the  sub- 
ject to  which  the  bill  relates.  Actuaries  of  ability  and  character 
and  of  independent  relations  have  been  consulted  concerning  it. 
Many  of  its  most  essential  provisions  were  taken  from  the  legisla- 
tion recommended  by  the  conference  of  governors,  attorneys-gen- 
eral and  insurance  commissioners  of  the  various  States,  held  in 
Chicago  in  1906  for  the  purpose  of  considering  insurance  abuses 
and  remedial  legislation  relating  thereto,  and  prepared  by  the  com- 
mittee appointed  by  such  conference. 


185 

The  personnel  of  this  conference  is  of  itself  of  a  character  to 
entitle  its  report  to  the  highest  consideration.  Governor  John  A. 
Johnson,  of  Minnesota,  was  its  chairman,  and  Frederick  H.  Nash, 
Esq.,  was  its  secretary.  The  committee  appointed  to  prepare  the 
report  consisted  of  the  following  insurance  commissioners :  Thomas 

D.  O'Brien,  Minnesota;   Zeno  M.  Host,  Wisconsin;   B.  F.  Carroll, 
Iowa;    J.   L.    Pierce,   Nebraska;    Henry   R.   Prewitt,   Kentucky; 
Thomas  E.   Drake,  District  of  Columbia ;    Reau  E.   Folk,  Ten- 
nessee;   W.  D.  Vandiver,  Missouri;    E.  Myron  Wolf,  California; 
A.   I.  Vorys,  Ohio;    B.  F.   Crouse,    Maryland,    and    George  H. 
Adams,  New  Hampshire;   the  following  attorneys-general:     E.  T. 
Young,  Minnesota;    J.   H.   Meyer,  New  York,  and  J.   E.  Bird, 
Michigan ;    and  Messrs.  F.  H.  Nash,  Massachusetts ;    N.  E.  Had- 
ley,  Michigan,  and  John  A.  Hartigan,  Minnesota. 

The  committee  also  had  the  benefit  of  the  presence  and  advice 
of  Butler  Ames,  M.  C.,  Massachusetts;  the  Legislative  Investigat- 
ing Committee  of  Wisconsin,  consisting  of  Mr.  James  A.  Frear, 
Chairman,  H.  L.  Ecker,  G.  A.  Beadle,  W.  S.  Braddock,  B.  Potter, 
J.  E.  Roche,  James  L.  O'Connor,  Counsel,  and  J.  M.  Glover,  Ac- 
tuary ;  the  Legislative  Investigating  Committee  of  Iowa,  repre- 
sented by  Messrs.  J.  M.  Jameson,  Chairman,  John  L.  Blaeckly,  N. 

E.  Kendall,  F.  F.  Jones  and  T.  E.  Cleary ;  also  Mr.  Earle  Stewart, 
Chairman  of  the  Legislative  Investigating  Committee  of  Ohio,  and 
the  following  members  of  the  Insurance  Committee  of  the  Com- 
mission on  Uniform  Laws :    Messrs.  Amasa  M.  Eaton,  C.  F.  Libby, 
Talcott  H.  Russell,  J.  C.  Richburg  and  Robert  W.  William*. 

Since  the  introduction  of  the  bill  it  has  received  the  attention 
and  thoughtful  study  of  the  members  of  the  House  and  Senate 
Committees  on  Insurance.  Public  hearings  have  been  held  and  full 
and  free  discussion  had.  Objections  and  criticisms  have  been  con- 
sidered and  wherever  such  objections  and  criticisms  have  seemed 
just  and  tenable,  modification  and  amendment  have  been  made.  As 
the  bill  now  stands  before  you  it  is  the  best  thought  of  many 
minds.  It  is  presented  to  you  in  response  to  a  widespread  and  im- 
perative need,  not  peculiar  to  Indiana,  but  common  to  all  the 
States.  It  is  a  part  of  an  effort  being  made  throughout  the  coun- 
try to  secure  the  reformation  of  life  insurance  practices  which  have 
been  and  are  injuring  the  business  of  life  insurance  and  wronging 
the  policy  holders  of  such  companies.  Its  passage  will  constitute 
the  first  great  step  toward  insurance  reformation  in  Indiana. 

The  reports  it  requires  of  the  companies  are  already  required 
in  a  number  of  the  States.  This  is  especially  true  in  Minnesota  and 


186 

Wisconsin.  These  reports  are  essential  if  present  abuses  are  to  be 
ended.  The  bill  puts  an  end  to  divided  service  on  the  part  of  de- 
partmental officials  by  placing  the  department  on  the  people's  side 
of  the  counter  and  by  requiring  those  who  administer  it  to  remain 
on  that  side  of  the  counter. 

It  does  not  deal  generally  with  questions  remedial  in  character, 
such  as  special  contracts,  rebates,  the  distribution  of  surplus,  the 
inhibition  of  political  contributions,  forms  of  policies,  real  estate 
holdings,  the  status  of  persons  soliciting  insurance,  the  issuance 
of  non-participating  policies  by  companies  issuing  participating 
policies,  the  election  of  directors,  the  retirement  of  capital  stock, 
the  preliminary  term  plan,  or  other  kindred  questions.  These  are 
left  to  be  covered  by  separate  and  specific  bills.  It  relates  wholly 
to  matters  of  departmental  administration  and  the  supervision  of 
insurance  companies  doing  business  in  the  State.  It  inhibits  agency 
companies,  foreign  and  domestic,  provides  for  publicity  as  to  sal- 
aries and  expenses,  and  for  the  making  of  reports  which  shall  give 
information  calculated  to  expose  extravagant  administration  and 
fraudulent  practices  wrherever  they  exist.  These  matters  are  all 
so  closely  related  to  the  administration  of  the  department  and  to 
the  supervision  of  the  administration  of  insurance  companies,  that 
they  come  naturally  and  logically  within  the  purview  of  legisla- 
tion creating  an  insurance  department. 

Representatives  of  certain  Indiana  life  insurance  companies 
have  based  their  objections  to  the  bill  on  the  ground  that  it  dis- 
criminates against  domestic  companies  and  in  favor  of  the  foreign 
companies  doing  business  in  the  State.  x  The  contention  is  abso- 
lutely without  foundation.  In  fact,  nothing  is  further  from  the 
truth.  The  bill  itself  is  the  best  answer  to  this  argument.  Every 
section  affects  foreign  and  domestic  companies  alike  save  four,  and 
one  of  these  relates  solely  to  foreign  companies.  Of  the  three  sec- 
tions, relating  exclusively  to  domestic  companies  Section  22  simply 
requires  agents  of  such  companies  to  procure  a  license  from  the 
insurance  department  before  soliciting  insurance,  and  fixes  a  fee 
of  $1.00  for  such  license.  The  present  law  requires  all  agents  of 
foreign  insurance  companies  doing  business  in  the  State  to  be 
licensed  and  the  fee  therefor  ranges  from  $3.00  to  $5.00.  This 
law  will  not  be  changed  by  the  passage  of  the  proposed  bill.  Here 
then  in  one  of  the  three  sections  which  apply  solely  to  domestic  com- 
panies, is  a  clear  discrimination  in  I  heir  favor.  As  suu-ovsted  Sec- 
tion 25  applies  only  to  foreign  insurance  companies.  It  is  one  of 
the  most  radical  sections  in  the  statute.  Sections  26  and  27  apply 


1ST 

to  domestic  companies  only.  Their  provisions  are  similar  to  the 
provisions  of  Section  25,  which,  as  we  have  seen,  applies  alone  to 
foreign  companies,  except  as  to  the  action  of  the  commissioner  in 
cases  of  insolvency  or  of  disobedience  by  the  companies  of  execu- 
tive orders  entered  by  the  commissioner.  In  the  event  of  the  insolv- 
ency of  a  foreign  company  doing  business  in  this  State  or  of  dis- 
obedience of  executive  orders  entered  of  record  by  him,  the  com- 
missioner is  authorized  by  Section  25  to  revoke  the  right  of  the 
company  to  do  business  in  the  State.  The  company  not  being  in- 
corporated under  our  laws  and  not  being  domiciled  in  the  State,  it 
is  difficult  to  see  how  more  than  this  could  be  done.  Our  courts 
could  have  no  jurisdiction  beyond  the  assets  of  the  company  within 
the  State.  The  limit  of  authority  is  reached  when  the  company 
is  deprived  of  the  right  to  conduct  business  within  our  borders. 
Domestic  companies  are  chartered  under  our  own  laws.  They  are 
domiciled  here  and  in  case  of  insolvency  or  disobedience  of  certain 
executive  orders  entered  by  the  commissioner,  the  commissioner  is 
authorized  to  institute  proceedings  in  the  courts  of  Marion  County 
for  the  appointment  of  a  temporary  receiver  and  in  proper  cases 
for  the  dissolution  of  the  company.  In  every  such  case  the  court 
has  ample  power  to  protect  the  rights  of  the  company  against  all 
aggressions  of  the  commissioner.  Indeed,  his  every  act  is  made 
the  subject  of  review  by  the  courts  at  the  will  of  any  company 
aggrieved. 

Instead  of  being  directed  against  domestic  companies  to  their 
injury,  its  fundamental  purpose  is  their  protection.  They  will  find 
in  it  a  sure  defense  from  the  assaults  of  foreign  companies  as  long 
as  their  own  affairs  are  managed  with  economy  and  integrity.  The 
certificate  of  the  department  it  creates  that  Indiana  companies  have 
complied  with  its  requirements  and  are  administering  their  affairs 
in  conformity  with  its  regulations,  will  be  accepted  at  home  and 
abroad  as  conclusive  evidence  of  good  character  and  of  honest  and 
efficient  management.  I  am  profoundly  impressed  with  the  con- 
viction that  the  establishment  of  such  a  department  will  do  more 
to  reinstate  Indiana  life  insurance  companies  in  the  confidence  of 
the  people  throughout  the  country  than  any  other  single  piece  of 
legislation  that  you  can  enact. 

The  expense  of  a  separate  department  has  also  been  the  basis 
of  some  criticism.  The  difference,  however,  between  the  annual  ex- 
pense of  a  separate  department  and  that  of  a  proper  department 
administered  in  the  Auditor's  office,  is 'but  nominal.  The  present 
measure  provides  for  a  total  annual  expense  of  $19,440.00.  The 


188 

bill  prepared  at  the  instance  of  Indiana  insurance  companies,  pend- 
ing in  the  Senate,  providing  for  an  insurance  department  in  the 
Auditor's  office,  carries  an  annual  expense  of  $14,720.00.  The  dif- 
ference is  but  $4,720.00.  This  difference  will  be  more  than  made 
up  in  fees,  the  collection  of  which  is  provided  for  and  which  are 
required  to  be  turned  into  the  treasury  as  the  property  of  the 
State.  The  greatest  benefit,  however,  to  accrue  from  the  estab- 
lishment of  a  separate  department  will  be  in  the  way  of  increased 
efficiency.  By  this  statement  I  mean  no  reflection  upon  either  the 
integrity  or  the  ability  of  the  present  Auditor  of  State. 

I  speak  only  of  conditions  admitted  and  well  known.  His 
office  is  already  in  need  of  additional  clerical  help  in  both  the  au- 
diting and  banking  departments.  As  the  fiscal  agent  and  account- 
ant of  the  State,  he  has  to  do  with  receipts  and  disbursements  ag- 
gregating each  year  something  like  $8,000,000.  He  is  by  law  a 
member  of  the  State  Board  of  Finance  and  his  duties  in  this  be- 
half will,  in  all  probability,  be  substantially  added  to  by  any  public 
depository  legislation  that  may  be  enacted.  He  is  a  member  of  the 
State  Printing  Board  which  has  to  do  with  the  making  of  contracts 
for  all  the  printing  for  the  offices  and  institutions  of  the  State,  the 
passing  upon  their  reports  and  requisitions  for  supplies  and  the 
allowance  of  all  bills  for  such  printing,  amounting  to  many  thou- 
sands of  dollars  annually.  He  is  also  a  member  of  the  State  Board 
of  Tax  Commissioners  and  is  required  by  the  present  law  to 
give  45  to  50  days  each  year  to  matters  coming  before  that 
body.  He  has  the  supervision  and  control  of  217  state  banks, 
over  200  private  banks,  70  trust  companies,  4  savings  and  more 
than  300  building  and  loan  associations,  all  of  which  impose  upon 
him  much  labor,  supervision  and  responsibility.  The  duties  of  the 
office  have  multiplied  many  times  in  recent  years  and  will  continue 
to  multiply  with  the  growth  of  the  State  in  wealth,  enterprise  and 
population.  A  single  comparison  will  serve  to  illustrate  this  point. 
In  1896  the  Auditor  of  State  collected  insurance  taxes  and  fees 
aggregating  $183,705.73;  in  1906,  $427,310.35.  In  1893  there 
was  not  a  single  domestic  legal  reserve  life  insurance  company  in 
the  State;  now  there  are  18,  with  more  than  30,000  policy  holders 
and  millions  of  dollars  of  insurance  in  force.  The  present  Auditor 
of  State,  recognizing  and  appreciating  the  conditions  I  here  pre- 
sent, recently  made  the  following  statement  in  a  letter  addressed  to 
the  Chairman  of  the  House  Committee  on  Insurance: 

"Realizing  the  importance  and  continued  growth  of  all  these  departments 
until  they  have  reached  a  magnitude  where  one's  best  judgment  would  dictate 


189 

that  the  public  and  the  insurance  world  can  best  be  served  by  placing  the 
supervision  of  1  he  insurance  companies  in  a  separate  department,  I  am  willing 
to  lay  aside  any  selfish  wish  of  mine  and  for  the  good  of  the  people  and  of  the 
State  acquiesce  in  and  recommend  the  establishment  of  a  separate  insurance 
department  under  such  wise  provisions  of  law  as  our  legislative  body  may 
enact.  I  do  this  without  any  idea  or  purpose  of  shirking  any  duty  that  may 
be  imposed  upon  me,  knowing  full  well  that  my  hand  and  brain  will  be  busy 
with  other  arduous  duties  in  the  Auditor's  office." 

The  head  of  the  State  insurance  department,  if  it  is  to  be  effect- 
ively administered,  must  necessarily  possess  something  of  special 
qualification.  He  ought  to  be  removed  from  the  exigencies  of  poli- 
tics and  placed  beyond  the  importunities  and  influences  of  the 
special  interests  which  constantly  seek  to  influence  his  official  ac- 
tion in  matters  relating  to  them.  Under  the  present  law  the  Au- 
ditor of  State  is  elected  for  a  term  of  two  years.  He  is  eligible  to 
renomination  and  election.  Whoever  is  Auditor  naturally  desires  to 
succeed  himself.  He  is  more  than  human  if  he  is  at  all  times  able 
to  resist  the  powerful  influences  that  are  brought  to  bear  upon 
him  in  matters  relating  to  insurance  supervision.  The  history  of 
the  office  in  the  last  twrenty  years  does  not  sustain  the  contention 
that  the  Auditor  of  State,  being  elected  by  the  people,  is  a  safer 
depository  of  the  power  necessary  to  the  proper  supervision  of  life 
insurance  than  a  commissioner  appointed  by  the  Executive.  Prior 
to  the  term  of  the  present  incumbent  of  that  office  no  man  in 
twenty  years,  with  a  single  exception,  has  administered  its  affairs 
with  fidelity  to  the  interests  of  the  people.  The  records  in  the 
office,  as  I  have  heretofore  shown  in  an  executive  message  to  this 
General  Assembly,  disclose  a  continuous  story  of  peculation  and 
defalcation — a  system  carried  on  without  interruption  save  for  the 
term  of  a  single  incumbent. 

The  Governor  of  the  State  cannot  succeed  himself.  Our  fa- 
thers, in  the  exercise  of  high  wisdom  and  far-seeing  statesman- 
ship, precluded  his  doing  so  by  constitutional  inhibition.  Who- 
ever enters  the  executive  office  assumes  its  duties  with  full  knowl- 
edge of  that  fact.  No  other  officer  in  the  State,  not  even  except- 
ing judicial  officers,  is  so  fully  and  entirely  removed  from  the  temp- 
tation to  use  his  position  for  political  purposes  or  in  response  to 
the  appeals  or  the  threats  of  special  interests  as  is  the  Executive. 
They  may  succeed  themselves  by  re-nomination  and  re-election.  He 
can  not.  Personally,  the  authority  to  appoint  a  commissioner  of  in- 
surance means  absolutely  nothing  to  the  present  incumbent  of  the 
executive  office.  The  duties  and  responsibilities  of  the  office  will 
soon  slip  from  his  shoulders,  to  be  assumed  by  another.  He  is  a 


190 

candidate  for  no  office.  He  has  no  use  for  a  political  machine, 
(iiven  the  authority  to  appoint,  selection  will  he  made  upon  quali- 
fication alone.  If  the  proposed  law  is  enacted  the  appointment  of 
a  commissioner  will  come  in  the  middle  of  the  executive  term,  and 
after  two  years'  experience  in  the  office  of  Governor,  any  man  who 
occupies  the  position  will  hesitate  long  before  he  declines  to  reap- 
point  a  commissioner  whose  services  during  the  term  of  four  years 
show  him  to  be  impartial,  courageous  and  efficient.  These  reasons 
lead  me  to  the  conclusion  that  the  head  of  the  department  should 
be  appointed  by  the  Executive. 

I  have  heretofore  called  your  attention  to  some  of  the  existing 
abuses  in  the  administration  of  the  present  insurance  department 
and  have  supplemented  what  I  have  said  by  facts  and  figures 
which  seem  to  me  to  be  conclusive.  I  desire,  however,  to  submit  fur- 
ther information  upon  the  subject. 

The  present  actuary  receives  a  salary  of  $2,000.00  per  annum 
from  the  State.  He  is  the  only  person  in  the  department  who  has 
technical  knowledge  of  the  business  of  life  insurance.  Whatever  is 
done  in  the  department  is  done  largely  upon  his  advice  and  under 
his  direction.  From  the  very  nature  of  the  case  this  is  necessarily 
so.  Being  in  the  employ  of  the  State  and  being  charged  with 
duties  in  relation  to  the  supervision  of  life  insurance  companies  do- 
ing business  in  the  State,  both  foreign  and  domestic,  his  place  is 
always  on  the  State's  side  of  every  question  arising  between  the 
State  and  insurance  companies.  Indeed  the  people  have  no  other 
representative  than  he.  Under  the  present  system,  however,  the 
actuary  spends  more  time  in  the  employment  of  the  companies 
whose  affairs  it  is  his  duty  to  supervise,  than  he  does  in  the  service 
of  the  State,  and  annually  receives  more  money  from  the  com- 
panies than  he  receives  from  the  State.  In  1905  the  present  ac- 
tuary of  the  department  received  from  the  State  $2,000.00.  But 
he  received  from  the  insurance  companies  of  the  State  in  the  way 
of  fees  $2,226.00.  In  1906  he  received  from  the  State  $2,000.00 ; 
from  the  companies,  $2,925.00.  In  the  month  of  January,  1907, 
his  salary  from  the  State  amounted  to  $166.662-3,  but  he  re- 
ceived from  the  insurance  companies  $716.00.  The  law  does  not 
forbid  this  divided  service,  but  the  condition  presented  seems  to  me 
to  be  an  intolerable  one.  In  1905  the  State  Life  Insurance  Com- 
pany paid  the  present  actuary  $350.00  ;  the  Inter-State  Life  Insur- 
ance Company  paid  him  $298.00;  the  American  Central,  $135.00; 
and  the  Reserve  Loan  Life  Company,  $443.00.  In  1906  the  State 
Life  Insurance  Company  paid  him  $425.00 ;  the  Inter-State  Life 


191 

Company,  $617.00 ;  the  American  Central  Company,  $188.00;  the 
Reserve  Loan  Life  Company,  $115.00.  In  the  month  of  January, 
1907,  the  State  Life  Insurance  Company  paid  him  $455.00;  the 
Reserve  Loan  Life  Company,  $123.00 ;  the  Inter-State  Life  Com- 
pany, $98.00.  The  proposed  bill  will  put  an  end  to  this  practice. 
If  it  be  permitted  to  continue  the  responsibility  will  be  yours  alone. 
If  you  fail  to  end  it,  you  may  be  able  to  make  satisfactory  answer 
to  the  people  who  commisioned  you,  but  as  for  me  I  am  unable  to 
conceive  an  adequate  answer. 

I  have  also  heretofore  called  your  attention  to  certain  abuses 
in  the  administration  of  the  affairs  of  certain  domestic  life  insur- 
ance companies,  which  have  long  existed  and  which  still  continue  to 
exist,  and  I  now  submit  additional  facts  and  further  information 
in  that  behalf.  In  doing  so  it  is  necessary  that  I  use  the  name  of 
a  certain  life  insurance  company  and  the  names  of  certain  of  its 
officers.  I  do  so  from  necessity  and  not  as  a  personal  attack  upon 
the  company  or  upon  the  individuals  to  whom  I  shall  advert.  I 
am  not  and  have  not  been  engaged  in  personal  attacks  upon  any 
one.  During  my  official  life  I  have  attacked  the  acts  of  no  man 
outside  the  purview  of  my  official  obligation.  And  then  only  when 
they  have  related  to  public  affairs  and  when  attack  and  exposure 
were  necessary  to  preserve  the  public  welfare.  In  such  cases  I 
have  spoken  with  all  the  vigor  and  directness  my  knowledge  of  the 
English  language  has  permitted,  but  I  have  done  so  in  every  in- 
stance without  personal  malice,  moved  only  by  a  sense  of  public 
duty. 

The  State  Life  Insurance  Company  has  no  capital  stock.  It  is 
a  mutual  company.  It  lias  no  asset  that  is  not  the  property  of  its 
policy  holders.  It  is  governed  by  a  board  of  five  directors.  The 
present  directors  hold  enough  proxies,  gathered  from  year  to  year, 
to  insure  their  re-election.  They  have  resolved,  by  written  resolu- 
tion spread  of  record  upon  their  minutes,  to  be  a  self-perpetuating 
body.  The  company  was  incorporated  in  1894.  It  is  now  12 
years  old.  The  following  facts,  taken  from  the  books  of  the  com- 
pany, disclose  the  character  of  administration  it  has  received  from 
the  hands  of  these  five  directors : 

In  1899,  A.  M.  Sweeney,  as  president,  received  a  salary  of 
$7,000.00;  as  director,  $600.00;  as  an  office  employe,  $2,000.00; 
total,  $9,600.00.  Samuel  Qninn  received  a  salary  as  vice-presi- 
dent of  $7,000. 00;  .MS  dim-tor,  $600. 00 ;  as  ,-tn  office  employe, 
$2,000. 00;  lolal,  $<),(J()0.()().  W.  S.  Wynn,  as  secretary,  received 
a  salary  of  $7,050.00;  as  director,  $600.00;  as  an  office  employe, 


192 

$2,000.00 ;  total,  $9,650.00.  Charles  F.  Coffin,  as  counsel,  received 
a  salary  of  $1,800.00;  as  director,  $600.00;  for  legal  services, 
$1,200.00;  total,  $3,600.00.  R.  W.  McBride  received  a  salary 
as  director  of  $600.00;  fees  for  legal  services,  $400.00;  total, 
$1,000.00. 

In  1900,  Mr.  Sweeney,  as  president,  received  a  salary  of 
$8,000.00 ;  as  director,  $1,250.00  ;  as  an  office  employe,  $1,750.00  ; 
total,  $11,000.00  Samuel  Quinn,  as  vice-president,  received  a  sal- 
ary of  $8,000.00;  as  director,  $1,000.00;  as  an  office  employe, 
$2,000.00;  total,  $11,000.00.  W.  S.  Wynn,  as  secretary,  received 
a  salary  of  $8,000.00;  as  director,  $1,000.00;  as  an  office  em- 
ploye, $2,000.00;  total,  $11,000.00.  Charles  F.  Coffin,  as  direct- 
or, received  a  salary  of  $1,000.00;  allowance  for  legal  expense, 
$4,000.00;  total,  $5,000.00.  R.  W.  McBride,  as  director,  re- 
ceived a  salary  of  $950.00 ;  allowance  for  legal  expense,  $500.00  ; 
total,  $1,450.00. 

In  1901,  Mr.  Sweeney,  as  president,  received  a  salary  of  $10,- 
250.00;  as  an  office  employe,  $750.00;  as  director,  $1,000.00; 
total,  $12,000.00.  Mr.  Quinn,  as  vice-president,  received  a  salary 
of  $10,200.00;  as  an  office  employe,  $1,000.00;  as  director, 
$800.00;  total,  $12,000.  Mr.  Wynn,  as  secretary,  received  a 
salary  of  $8,000.00 ;  as  an  office  employe,  $3,000.00 ;  as  director, 
$1,000.00;  total,  $12,000.00.  Mr.  Coffin,  as  director,  received  a 
salary  of  $1,000.00;  allowance  for  legal  expense,  $4,000.00;  to- 
tal, $5,000.00. 

Mr.  McBride,  as  director,  received  a  salary  of  $1,000.00;  al- 
lowance for  legal  expense,  $450.00;  total,  $1,450.00. 

In  1902,  Mr.  Sweeney,  as  president,  received  a  salary  of  $12,- 
000.00;  as  director,  $1,500.00;  total,  $13,500.00.  Mr.  Quinn, 
as  vice-president,  received  a  salary  of  $12,000.00 ;  as  director, 
$1,500.00;  total,  $13,500.00.  Mr.  Wynn,  as  secretary,  received 
a  salary  of  $12,000.00 ;  as  director,  $1,500.00  ;  total,  $13,500.00. 
Mr.  Coffin,  as  director,  received  a  salary  of  $1,500.00;  allowance 
for  legal  expense,  $4,500.00 ;  total,  $6,000.00.  Mr.  McBride,  as 
director,  received  a  salary  of  $1,500.00;  allowance  for  legal  ex- 
pense, $100.00 ;  total,  $1,600.00. 

In  1903,  Mr.  Sweeney,  as  president,  received  a  salary  of  $16,- 
000.00;  Mr.  Quinn,  as  vice-president,  received  a  salary  of  $16,- 
000.00;  Mr.  Wynn,  as  secretary,  received  a  salary  of  $16,000.00; 
Mr.  Coffin,  as  director,  a  salary  of  $1,525.00,  and  an  allowance  on 
account  of  le^al  expense  of  $0,475.00;  total,  $8,000.00.  Mr. 


193 

McBride,  as  director,  received  a  salary  of  $1,500.00,  and  an  allow- 
ance on  account  of  legal  expense  of  $500.00 ;   total,  $2,000.00. 

In  1904,  Mr.  Sweeney,  as  president,  received  a  salary  of  $18,- 
000.00;  Mr.  Quinn,  as  vice-president,  received  a  salary  of  $18,- 
000.00 ;  Mr.  Wynn,  as  secretary,  received  a  salary  of  $18,000.00 ; 
Mr.  Coffin,  as  director,  received  a  salary  of  $204.00,  and  an  al- 
lowance on  account  of  legal  expense  of  $14,000.00;  total,  $14,- 
204.00.  Mr.  McBride,  as  director,  received  a  salary  of  $2,000.00 
and  an  allowance  on  account  of  legal  expense  of  $6,300.00 ;  total, 
$8,300.00. 

In  1905,  Mr.  Sweeney,  as  president,  received  a  salary  of  $20,- 
000.00;  traveling  expenses,  $491.25;  total,  $20,491.25.  Mr. 
Quinn,  as  vice-president,  received  a  salary  of  $20,000.00 ;  travel- 
ing expenses,  $1,630.00;  total,  $21,630.00.  Mr.  Wynn,  as  sec- 
retary, received  a  salary  of  $20,000.00;  traveling  expenses, 
$481.70;  total,  $20,481.70.  Mr.  Coffin,  as  director  and  counsel, 
received  a  salary  of  $9,000.00 ;  allowance  on  account  of  legal  ex- 
penses, $11,000.00,  and  on  account  of  traveling  expense,  $505.00, 
a  total  of  $20,505.00.  Mr.  McBride  received  salary  and  allow- 
ances aggregating  $8,000.00. 

In  1906,  Mr.  Sweeney,  as  president,  received  a  salary  of  $16,- 
000.00;  Mr.  Quinn,  as  vice-president,  received  a  salary  of  $16,- 
000.00,  and  traveling  expenses  aggregating  $1,140.00;  total, 
$17,140.00.  Mr.  Wynn,  as  secretary,  received  a  salary  of  $16,- 
000.00,  and  an  allowance  of  $221.50  for  traveling  expenses; 
total,  $16,221.50.  Mr.  Coffin,  as  director,  received  a  salary  of 
$16,000.00  and  an  allowance  for  traveling  expenses  of  $500.00; 
total,  $16,500.00.  Mr.  McBride  received  a  salary  and  allowance 
aggregating  $7,000.00. 

Not  a  dollar  of  the  money  allowed  for  traveling  expenses  is 
vouchered,  and  with  the  exception  of  the  allowances  made  to  Mr. 
Wynn,  no  itemized  account  thereof  has  been  given. 

It  will  be  seen  that  Mr.  Sweeney,  while  drawing  one  salary  as 
president  of  the  company  and  another  as  director,  during  the  years 
1899,  1900  and  1901,  drew  $4,500.00  as  an  "office  employe";  that 
Mr.  Quinn  under  like  circumstances  as  to  salaries  as  an  officer  and 
director,  drew  $4,000.00  as  an  "office  employe,"  and  Mr.  Wynn, 
$6,000.00.  What  their  duties  were  as  "employes"  is  left  to  con- 
jecture. 

The  policy  holders  are  entitled  to  know  why  $14,500  was 
paid  in  three  years  to  these  three  men  in  addition  to  the  dual  sal- 


194 

aries  they  were  receiving  as  executive  officers  and  directors.  They 
have  a  right  to  be  advised  as  to  the  services  performed  by  them. 

In  eight  years  Mr.  Sweeney  drew  from  the  treasury  of  the 
company,  on  account  of  salary  and  allowances  made  to  him,  $116,- 
660.25;  Mr.  Quinn,  $118,870.00;  Mr.  Wynn,  $117,852.00;  Mr. 
Coffin,  $78,809.00 ;  Mr.  McBride,  $30,800.00.  In  the  four  years, 
1903,  1904,  1905,  1906,  four  men  drew,  in  salaries  and  allow- 
ances, from  the  treasury  of  the  company,  an  aggregate  of  $274,- 
196.45.  In  the  three  years,  1904,  1905  and  1906,  allowances  were 
made  to  two  men  as  directors  and  counsel  of  the  company  aggre- 
gating $74,509.00.  In  eight  years  the  total  allowance  to  these 
five  men  aggregate  $462,947.45 — almost  a  half  million  dollars. 

The  bill  pending  creates  a  department  with  authority  to  put  an 
end  to  such  wasteful  and  systematic  misappropriation  of  trust 
money  as  that  evidenced  by  the  figures  I  have  just  given.  If  this 
condition  is  permitted  to  continue,  the  responsibility  for  its  con- 
tinuance will  be  yours.  If  you  do  not  end  it,  it  may  be  when  you 
return  to  your  homes  you  can  make  satisfactory  answer  to  the  peo- 
ple whose  commissions  you  hold,  but  I  am  unable  to  conceive  an  ade- 
quate answer  for  such  failure. 

In  addition  to  these  allowances,  $8,306.15  were  paid  in  1896 
and  $11,562.48  in  1897,  to  a  corporation  known  as  the  Star 
Agency  Company,  on  account  of  collections  of  premiums  made  by 
it.  I  am  advised  that  Messrs.  Sweeney,  Quinn  and  Wynn  were 
stockholders  in  that  corporation.  If  so,  they  were  on  both  sides  of 
the  counter  when  this  money  was  paid. 

In  1904,  $3,675.38  were  paid  to  a  single  individual  for  in- 
spection services  and  $5,116.66  to  a  company  known  as  the  Na- 
tional Agency  Company.  I  am  advised  that  this  company  is  op- 
erated by  and  under  the  control  of  one  of  the  employes  in  the 
home  office  of  the  State  Life  Insurance  Company. 

In  1905,  $9,835.16  were  paid  to  this  company,  making  an  ag- 
gregate of  $14,951.82  paid  to  it  in  two  years,  and  a  total  on  ac- 
count of  inspection  services  within  that  time  of  $18,627.20. 

The  aggregate  allowances  made  in  1905  to  Messrs.  Sweeney, 
Quinn,  Wynn,  Coffin  and  McBride  and  to  the  National  Agency 
Company,  were  $93,942.11. 

The  books  *of  the  company  also  disclose  the  payment,  in  the 
month  of  February,  1899,  of  six  several  checks  payable  to  the 
cashier  of  the  company  and  by  him  turned  over  to  the  executive 
committee  of  the  company,  aggregating  $3,290,  on  account  of 
"attorneys'  fees."  None  of  this  money  was  used  in  the  employment 


195 

of  counsel.  The  company  had  able  and  efficient  counsel  of  its 
own.  The  Sixty -first  General  Assembly  of  the  State  of  Indiana 
was  then  in  session.  It  is  now  admitted  by  the  officers  of  the  com- 
pany that  the  sums  represented  by  these  several  checks  were  used 
for  the  purpose  of  securing  the  passage  of  legislation  then  pend- 
ing in  that  body.  The  entry  "attorneys'  fees"  upon  the  books  was 
simply  a  blind  to  conceal  the  real  purpose  for  which  these  funds 
were  used. 

It  is  of  the  utmost  importance,  in  the  administration  of  every 
life  insurance  company,  that  every  expenditure  in  excess  of  nomi- 
nal sums  should  be  itemized  and  vouchered.  Under  the  present 
system  entries  upon  the  books  of  the  company  of  "traveling  ex- 
penses" or  "attorneys'  fees"  constitute  the  only  information  given. 
Such  entries  are  of  no  value  in  ascertaining  the  actual  use  made 
of  the  money  in  question  as  we  have  seen  in  the  items  just  named. 
They  may  readily  be  used  to  conceal  unqualified  sins. 

The  figures  I  have  given  measure  to  some  extent  the  possibili- 
ties under  the  present  system  of  State  supervision  for  the  personal 
enrichment  of  the  officers  of  these  companies  and  disclose  better 
reasons  why  the  men  who  are  profiting  thereby  are  opposed  to  the 
proposed  legislation  than  any  they  have  as  yet  given  to  either  you 
or  to  the  public. 

As  already  suggested,  the  bill  inhibits  the  licensing  of  agency 
companies.  It  applies  to  all  such  companies  whether  doing  busi- 
ness for  domestic  or  foreign  insurance  companies,  and  whether 
they  themselves  be  domestic  or  foreign  corporations.  It  incorpo- 
rates substantially  the  language  of  the  legislation  proposed  by  the 
conference  on  uniform  insurance  legislation  upon  this  subject.  It 
is  insisted  by  the  promoters  of  these  companies  that  they  furnish 
insurance  companies  the  means  of  acquiring  a  large  volume  of  in- 
surance at  less  cost  then  it  could  be  acquired  through  personal 
agencies  responsible  directly  to  the  insurance  companies.  The  ex- 
periences, however,  of  the  last  two  years  do  not  sustain  the  con- 
tention. So  far  as  I  have  been  able  to  learn  the  commissions  pro- 
vided for  in  the  contracts  between  such  companies  and  the  insur- 
ance companies  have  been  excessive  without  exception.  For  in- 
stance :  the  contract  of  the  Lafayette  Life  Insurance  Company  with 
its  agency  company  provides  for  the  payment  of  10  per  cent,  on 
all  renewal  premiums  collected.  The  contract  of  the  Inter-State 
Life  provides  for  the  payment  of  15  per  cent,  for  the  second  year, 
5  per  cent,  for  the  third,  10  per  cent,  for  the  fourth  year,  and  7% 
per  cent,  until  13  annual  premiums  have  been  paid;  the  contract 


with  the  Reserve  Loan  Life  requires  the  payment  of  7%  per  cent, 
on  all  renewal  premiums,  and  that  of  the  State  Life  with  the  State 
Agency  Company  provides  for  the  payment  of  7%  Per  cent,  on 
all  renewal  premiums  on  policies  written  either  before  or  after  the 
execution  of  the  contract.  Renewal  premiums  are  being  collected 
in  this  State  now  by  some  insurance  companies  at  a  cost  of  1% 
per  cent.,  and  in  no  instance  ought  such  collections  to  cost  more 
than  5  per  cent.  These  companies  are  simply  open  doors  to  ex- 
travagance and  fraud.  They  are  officered  by  high  salaried  officers. 
Their  stockholders  have  been  in  many  instances  officers  of  the  in- 
surance companies  whose  representatives  they  are  and  without  ex- 
ception they  have  been  organized  at  the  instance  of  insurance  offi- 
cials. A  more  striking  illustration  of  the  truth  of  this  can  scarcely 
be  desired  than  that  furnished  in  the  late  State  Agency  affair  of 
the  State  Life  Insurance  Company. 

I  know  of  no  worse  misfortune  that  could  befall  domestic  life 
insurance  companies  than  your  failure  to  enact  effective  insurance 
legislation.  The  conditions  I  have  described  to  you  exist.  They 
are  not  to  be  talked  or  reasoned  away.  They  will  continue  to  ex- 
ist until  the  law,  backed  by  efficient  executive  authority,  strikes 
them  down.  Till  this  is  done  the  question  of  such  legislation  will 
remain  open.  The  matter  can  not  be  definitely  settled  until  it  is 
settled  right.  If  it  is  not  settled  right  the  agitation  will  continue 
for  the  next  two  years  and  until  another  General  Assembly  shall 
have  been  elected  and  convened.  Agitation  and  discussion,  though 
helpful  to  the  public  in  its  effort  to  recover  its  rights,  can  not  be 
helpful  to  the  insurance  companies.  Every  honest  insurance  offi- 
cial and  every  policy  holder  ought  to  join  hands  in  an  effort  to 
obtain  legislation  that  will  end  the  conditions  complained  of.  These 
ended,  agitation  and  discussion  will  cease. 

The  people  expect,  and  have  a  right  to  expect,  effective  legis- 
lation at  your  hands.  Enactments  with  high  sounding  titles  cov- 
ering weak  and  ineffectual  provisions,  will  not  do.  Such  measures 
will  not  end  present  conditions  nor  stop  discussion.  Time  and  op- 
portunity both  are  yours.  And  the  people  know  they  are  yours. 
You  are  not  like  the  hapless  mother  in  travail.  She  must  needs 
give  birth  to  whatsoever  has  been  begotten.  But  you  have  the 
power  to  choose.  You  can  send  forth  men-children  instead  of  still- 
born sexless  things,  if  you  desire.  This  power  of  choice  measures 
the  weight  and  height  of  your  responsibility. 

At  such  an  hour,  personalities  should  be  forgotten.  Supposed 
"political  advantages"  and  "tactical  positions"  assumed  for  parti- 


197 

san  purposes  will  in  the  end  be  valueless.  Every  safe  path  leads 
to  a  higher  plane  than  the  field  of  factional  dissensions  or  of  party 
strife.  Into  those  safer  paths  I  am  willing  to  go  with  you,  ma- 
jority and  minority,  friend  and  foe,  leaving  personal  differences  to 
be  settled  at  other  times  and  in  other  forums,  that  the  public  wel- 
fare may  be  conserved  and  the  rights  of  the  people  preserved. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

SENATE  ENROLLED  ACT  No.  248. 

MARCH  8,  1907. 

Mr.  President  and  Gentlemen  of  the  Senate: 

I  herewith  return  to  the  Senate,  Senate  Enrolled  Act  No.  248, 
in  compliance  with  the  request  of  the  Senate  that  the  same  should  be 
returned  to  it. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


Special  Messages  to  the  Special 

Session  of  the  Sixty-Fifth 

General  Assembly 


(199) 


201 
'NIGHT  RIDER"  SITUATION  IN  INDIANA. 


SEPTEMBER  24,  1908. 
Mr.  President  and  Gentlemen  of  the  Senate: 

Engrossed  Senate  Resolution  No.  9,  requesting  the  Executive 
"to  furnish  at  his  earliest  convenience  to  the  Finance  and  Agricul- 
tural Committees  and  to  the  Senate  all  documents  and  information 
in  his  possession  relative  to  the  'Night  Rider'  situation,"  has  been 
received  and  given  consideration. 

In  answer  thereto  I  beg  to  submit  that  my  information  has 
come  to  me  through  letters  and  documents  filed  in  the  executive 
office  by  persons  living  in  localities  where  the  threats  and  depreda- 
tions complained  of  have  been  made  or  committed;  from  personal 
interviews  with  many  responsible  citizens  from  said  localities,  and 
from  investigations  made  by  the  Adjutant-General  of  the  State 
and  other  agents  under  executive  direction. 

For  some  three  years  there  has  been  an  effort  on  the  part  of 
certain  tobacco  growers  living  in  the  tobacco  districts  in  the  State 
of  Kentucky,  to  control  the  production  and  sale  of  tobacco  through 
an  organization  known  as  the  "American  Society  of  Equity."  The 
successful  pooling  of  a  tobacco  crop  depends  upon  securing  the  as- 
sent and  co-operation  of  enough  tobacco  growers  to  substantially 
control  the  production  and  sale  of  tobacco  each  year.  This  effort 
has  led  to  differences  among  tobacco  growers,  some  preferring  to 
determine  for  themselves  the  extent  of  their  own  planting  of  to- 
bacco and  the  marketing  of  their  own  crops.  These  differences 
have  intensified  and  widened  until  enmities  have  been  engendered 
between  the  independent  owners  and  those  belonging  to  the  society, 
of  a  character  to  challenge  serious  consideration.  Under  cover  of 
conditions  thus  created,  organized  bands  of  men  on  horseback, 
popularly  known  as  "Night  Riders,"  because  they  ride  and  com- 
mit their  depredations  in  the  night,  have  ridden  to  and  fro  over  the 
tobacco  section  of  the  State  of  Kentucky,  terrorizing  the  people, 
destroying  crops,  burning  barns,  and  sometimes  killing  innocent 
citizens  who  have  refused  to  diminish  the  planting  of  tobacco  or 
to  pool  their  crops  when  produced.  The  entire  National  Guard  of 
the  State  seems  to  have  been  insufficient  to  meet  and  control  the 
situation.  In  some  counties  the  condition  has  been  and  now  is  but 
little  better  than  anarchy.  Even  railway  depots  and  structures 
have  been  burned  because  the  National  Guard  was  permitted  to 
encamp  upon  the  company's  right  of  way.  Within  the  last  two 


202 

years  the  American  Society  of  Equity  has  been  effectively  organ- 
ized in  this  State  and  in  Ohio. 

In  the  early  spring,  at  the  time  of  sowing  the  tobacco  beds, 
the  tobacco  growers  in  Ohio  and  Indiana  were  quite  generally 
warned  not  to  plant  a  crop  this  year  because  the  crop  produced  and 
pooled  last  year  had  not  yet  been  marketed,  as  satisfactory  prices 
had  not  been  obtained.  These  notices  varied  in  form,  but  were 
all  to  the  same  effect.  Many  of  them  were  mailed  at  postoffices  in 
Kentucky ;  some  of  them  from  Cincinnati,  Ohio ;  others  from  post- 
offices  in  Indiana.  Yet  others  were  tacked  upon  doors  or  left  in 
mail  boxes.  Copies  of  some  of  the  notices  are  submitted: 

"Did  you  ever  stop  to  think  what  you  were  doing  by  not  cutting  out  the 
1908  crop?  You  are  running  great  risk  by  standing  in  with  the  Trust.  We  have 
cut  out  the  1908  crop  and  made  better  prices  for  you,  which  you  are  taking 
advantage  of.  We  are  holding  our  tobacco,  and  our  people  are  suffering. 
We  say  cut  it  out!  You  had  better  do  so  for  your  own  good." 

"Sir:  Did  it  ever  occur  to  you  it  would  be  better  for  you  to  cut  your 
1908  crop  out?  Do  you  not  realize  you  and  the  tobacco  trust  are  squeezing 
the  life  out  of  many  women  and  children?  We  say  stop!  What  do  you  say?" 

"Sir:  You  had  better  cut  out  your  1908  crop  of  tobacco  or  you  may  not 
have  any  barn  to  put  it  in.  We  are  watching  you." 

These  notices  were  usually  signed  "Night  Riders"  or  "N.  R.," 
and  with  them  matches  were  usually  enclosed. 

The  tobacco  beds  of  certain  persons  who  failed  to  heed  the  warn- 
ing given  were  destroyed  in  several  counties  of  the  State,  and  in 
Ohio  barns  were  burned  and  other  depredations  committed.  The 
Governor  of  that  State  recently  informed  me  that  Ohio  has  been 
compelled  to  expend  during  the  spring  and  summer  more  than 
$40,000  to  protect  the  property  and  lives  of  her  citizens  living  in 
the  counties  of  that  State  bordering  upon  the  Ohio  River,  and  that 
even  then  the  Executive  Department  has  not  been  able  altogether 
to  prevent  the  destruction  of  property.  Conditions  in  Indiana  be- 
came such  in  April  and  May  as  to  cause  many  tobacco  growers — 
men  of  integrity  and  of  substantial  property — to  appeal  to  the 
Executive  of  the  State  for  protection.  The  appeals  became  so 
numerous  and  urgent  that  I  sent  the  Adjutant-General  to  make  in- 
vestigation. His  investigation  disclosed  facts  amply  justifying  the 
fear  and  alarm  of  those  complaining.  Other  agents  were  employed 
by  the  Executive  and  further  investigations  made.  In  some 
instances  local  officials  were  appealed  to;  in  other  instances  no  ap- 
peal was  made  to  them  because  of  information  that  such  officials 
were  themselves  either  members  of  the  organization,  whose  repre- 


203 

scntatives  were  infracting  the  law,  or  were  in  full  sympathy  with 
the  infractions  committed  or  threatened.  After  the  tobacco  crop 
was  planted,  threats  and  depredations  in  this  State  ceased  for  a 
while,  but  by  the  latter  part  of  August  both  were  renewed,  the  form 
of  the  notice  sent  out  at  that  time  frequently  running  as  follows : 
"Pool  your  tobacco.  A  hint  to  the  wise  is  sufficient.  N.  R." 

This  notice  has  been  almost  invariably  accompanied  with  matches, 
implying  the  intent  of  arson  if  the  warning  was  not  heeded.  The 
tobacco  crop  while  growing  could  not  be  destroyed  without  detec- 
tion, but  now  as  it  is  being  cut  and  housed  it  may  be  easily  de- 
stroyed by  burning  the  barns  or  sheds  in  which  it  is  enclosed.  In 
the  investigations  made  I  have  expended  $680.00  of  the  Governor's 
Emergency  Contingent  Fund  during  the  present  fiscal  year.  I 
here  submit  extracts  from  some  of  the  letters  I  have  received : 

"The  tobacco  industry  in  this  part  of  the  State  amounts  to  thousands 
of  dollars  annually,  which  will  be  an  entire  loss  unless  some  assurance  is 
given  at  once.  Our  tenants  are  mostly  panic  stricken  and  are  leaving  us. 
Hoping  you  will  give  this  your  immediate  attention  and  will  find  some  way 
in  which  our  rights  and  property  may  be  protected,  we  are,"  etc. 

"We  believe  they  will  try  to  destroy  our  property  if  we  do  not  receive 
protection  in  some  way.  We  believe  we  should  have  the  privilege  of  raising 
on  our  own  farms  such  crops  as  we  see  fit.  We  believe  these  threats  are 
sent  out  by  order  of  the  Tobacco  Association  of  Kentucky,  and  are  intended 
to  be  carried  out." 

"Every  person  that  raises  tobacco  in  this  vicinity  has  received  similar 
notices.  Will  you  please  answer  immediately  and  let  us  know  what  protection 
if  any,  we  may  expect?" 

"What  aid,  if  any,  can  the  State  furnish  us  in  our  efforts  to  peacefully 
follow  our  vocations?" 

"Numerous  threatening  letters  have  been  received  and  personal  threats 
made.  The  situation  is  becoming  serious." 

"I  have  no  doubt  some  barns  will  be  burned  and  likely  soon." 

"I  have  no  doubt  that  the  plan  is  to  destroy  crops  later  on  and  later  still 
to  resort  to  the  burning  of  barns.  I  have  many  times  said  in  discussing 
the  situation  in  Kentucky  that  1  did  not  believe  such  practices  would  be 
permitted  in  our  State." 

"There  is  a  spirit  of  anarchy  and  we  ask  you  to  take  such  steps  as  you 
think  best  to  suppress  it  and  bring  the  guilty  parties  before  the  courts.  If 
we  don't  want  the  same  reputation  Kentucky  has,  you  must  'nip  it  in  the 
bud'." 

"The  man  who  received  the  letter  is  a  respectable  citizen  and  has  on 
hand  a  fine  crop  of  tobacco.  He  is  scared  almost  to  death  and  asked  me  to 
inform  you.  If  he  sells  his  tobacco  he  is  warned  to  leave  the  county." 

The  above  is  from  a  letter  received  on  the  22d  inst. 


204 

"On  one  night  during  the  latter  part  of  August  a  supposed  'Night 
Rider'  from  the  Owensboro  Ferry  went  out  through  the  Patronville  neighbor- 
hood and  tobacco  district,  and  left  letters  in  each  mail  box  along  the  road, 
warning  tobacco  growers,  and  closing  with  the  threat  'Save  your  back  and 
your  barn.'  If  Mr.  Lieb  had  the  welfare  of  his  own  constituency  at  heart 
he  could  have  found  all  the  information  on  this  subject  he  wanted  and  would 
not  now  be  asking  the  Governor  for  more  specific  information. 

"In  this  vicinity  the  growers  have  had  their  tobacco  plants  destroyed  and 
barns  burned,  two  large  barns,  one  recently.  The  owner  of  this  barn  was 
warned  to  cease  growing  his  tobacco.  That  night  they  burnt  his  barn  con- 
taining 11  head  of  horses  and  mules,  40  tons  of  hay,  a  lot  of  grain  and  all  his 
farming  implements." 

This  letter  was  received  on  the  21st  inst. 

These  letters,  complaints  and  appeals  could  be  multiplied  al- 
most without  number,  but  repetition  is  needless. 

I  am  advised  that  two  barns  other  than  those  mentioned  in  the 
communication  above  have  been  burned  within  the  last  thirty  days, 
and  I  am  in  receipt  of  a  statement  from  Spencer  County,  signed 
by  three  reputable  citizens  of  that  county,  one  a  buyer  of  tobacco, 
one  a  prominent  lawyer,  and  the  other  a  substantial  tobacco  grow- 
er, setting  forth  conditions  of  a  character  well  calculated  to  chal- 
lenge the  consideration  of  every  thoughtful  man,  a  copy  of  which 
accompanies  this  message  and  is  filed  herewith. 

I  do  not  charge  the  American  Society  of  Equity  with  the 
threats  made  or  the  crimes  committed.  I  do  not  know  that  those 
who  make  or  commit  them  are  members  of  such  society.  I  do  not 
here  seek  to  fix  either  guilt  or  responsibility.  I  simply  submit  the 
condition. 

The  transmission  of  the  letters  and  documents  I  have  received, 
the  information  I  have,  or  the  particulars  of  the  investigations  I 
have  made,  in  further  detail  than  I  have  given  them,  is  incompatible 
with  the  public  welfare.  With  due  deference  to  your  honorable 
body  and  with  all  courtesy  and  respect  I  am  compelled  to  withhold 
them.  Their  publication  would  subject  the  persons  writing  them 
and  the  persons  who  have  brought  me  information  to  immediate 
persecution  and  attack.  I  deem  it  my  duty  to  protect  these  people ; 
to  withhold  all  names,  all  letters  and  documents  except  the  copy 
of  the  statement  filed  herewith,  consent  of  the  parties  signing  it  to 
file  it  having  been  obtained.  The  right  of  the  Executive  to  exer- 
cise his  discretion  in  such  case  is  clear  and  well  established.  The 
conditions  described  obtain  in  more  or  less  degree  in  all  the  coun- 
ties bordering  upon  the  Ohio  River  in  which  tobacco  is  produced. 
In  some  of  the  counties  the  situation  is  really  grave;  the  danger 


205 

imminent.  I  have  convened  the  General  Assembly  in  special  ses- 
sion. The  facts  are  before  you.  I  have  asked  for  additional  funds 
and  authority  that  I  may,  in  some  measure,  discharge  the  duty  of 
the  State  to  the  citizens  whose  property  and  lives  are  threatened. 
The  responsibility  is  now  yours.  If  you  act  upon  the  recommen- 
dations made  and  serious  trouble  is  averted  without  the  use  of  the 
appropriation  made  or  the  exercise  of  the  authority  conferred,  no 
harm  will  have  been  done.  If  you  fail  to  act  and  conditions  that 
threaten  finally  obtain,  I  am  at  a  loss  to  understand  how  you  will 
justify  your  failure. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

To  His  Excellency,  J.  Frank  Hanly,  Governor  of  the  State  of  Indiana: 

For  your  information  with  reference  to  the  Night  Rider  situation  in 
southern  Indiana,  we  desire  to  submit  the  following  statement  as  to  the  con- 
dition in  Spencer  County: 

That  Spencer  County  produced  last  year  about  4,000,000  pounds  of  tobacco 
of  the  aggregate  value  of  about  $300,000;  that  there  is  now  growing  and  in 
process  of  curing,  a  crop  in  excess  in  quantity  and  value  of  last  year's  crop; 
that  Spencer  County  is  the  southernmost  county  in  the  State,  and  lies  in  close 
proximity  to  the  Night  Rider  depredations  in  the  State  of  Kentucky;  that 
in  many  cases  the  tobacco  crop  is  grown  principally  by  tenants  and  ranges 
in  acreage  from  one  to  about  ten  or  twelve  acres  per  tenant;  that  at  Lake 
in  Luce  township,  there  is  a  Society  of  Equity  organized  for  the  purpose  of 
pooling  the  tobacco  crop  in  Spencer  County;  that  for  two  years  last  past  it 
has  pooled  some  tobacco;  that  about  eight  weeks  ago  notices  were  dis- 
tributed throughout  the  southern  end  of  this  county  containing  this  language: 
"Pool  your  tobacco.  A  hint  to  the  wise  is  sufficient.  N.  R." 

These  notices  were  enclosed  in  a  plain  envelope,  with  from  two  to  three 
matches,  and  left  at  the  late  hours  at  night  at  the  gates,  doors  and  barns 
of  perhaps  125  tobacco  growers.  These  notices  were  printed  upon  plain 
bond  paper  about  two  by  three  inches,  and  from  all  indications  the  printing 
was  done  with  a  rubber  stamp.  One  or  two  days  following  the  distribution 
of  these  notices  certain  officers  of  the  Society  of  Equity  canvassed  among  the 
respective  farmers  requesting  them  to  sign  pooling  contracts,  pooling  their 
tobacco  with  this  society.  Some  of  the  farmers  signed  through  fear;  some 
signed  willingly;  many  refused  to  sign. 

This  notice  produced  fear  and  anger  among  many  of  the  farmers.  It 
is  the  general  opinion  of  the  citizens  of  Spencer  County  that  there  is  danger 
of  barns  being  burned  and  property  destroyed  in  the  event  that  the  farmers 
do  not  pool  their  tobacco.  It  is  also  common  talk  among  the  farmers  that 
if  any  barns  of  tobacco  is  destroyed,  the  origin  of  which  can  be  traced  to 
parties  engaged  in  the  pooling  of  tobacco  that  lives  will  be  sacrificed  and 
property  belonging  to  those  who  are  attempting  to  force  the  pooling  of 
tobacco  will  also  be  destroyed. 


206 

The  situation  is  such  at  the  present  time  that  if  any  barns  are  burned 
that  can  reasonably  be  traced  to  the  Night  Riders  that  all  insurance  on  all 
tobacco  barns  and  farmers'  barns  containing  tobacco  will  be  cancelled,  and 
that  buyers  of  tobacco  in  Spencer  County  will  be  compelled  to  go  out  of  the 
market  on  account  of  not  being  able  to  protect  their  property  with  insurance; 
that  some  of  the  leading  companies  are  now  refusing,  and  have  so  notified 
their  agents  not  to  take  any  further  risks  on  tobacco  in  Spencer  County. 

We  desire  to  say  to  you  that  the  chief  objection  by  the  farmers  to  pool- 
ing their  tobacco  in  the  pooling  house  of  the  above  society  is  that  the  society 
requires  them  to  deposit  their  tobacco  in  their  warehouse  to  be  classified, 
mixed  and  bulked  with  all  tobacco  placed  in  the  pooling  house;  that  the 
society  does  not  give  to  the  farmer  any  contract,  bond,  nor  indemnity  that  it 
will  safely  keep  his  tobacco  and  indemnify  him  against  damages  in  case  it 
is  injured  in  bulk  or  in  handling.  In  fact  the  situation  is  simply  this: 

The  farmer  under  the  pooling  agreement  deposits  his  tobacco  with  the 
society  and  thereby  loses  all  control  over  it  as  to  its  sale,  the  price,  insurance 
and  its  return  to  the  farmer  in  case  it  is  not  sold  or  handled  properly;  that 
the  officers  of  this  society  grade  the  tobacco  and  control  it  until  it  is  finally 
sold.  These  officers  receive  certain  compensation  for  their  services.  The 
compensation  of  the  officers  and  all  expense  is  fixed  and  created  by  the  society 
and  the  tobacco  grower  has  no  voice. 

We  also  desire  to  call  your  attention  to  the  fact  that  the  present  repre- 
sentative from  Spencer  County  is  the  father-in-law  of  the  attorney  and  con- 
fidential advisor  of  this  Society  of  Equity;  that  this  confidential  advisor's 
father  is  the  chief  pooling  officer  of  this  society  and  is  the  grader  and  classi- 
fier of  the  tobacco  pooled. 

It  is  our  opinion  and  the  opinion  of  many  of  the  leading  citizens  of 
Spencer  County  that  the  Governor  should  be  clothed  with  such  power  as  will 
enable  him  to  deal  promptly  and  effectually  with  any  depredations  that  may 
be  committed.  A  stringent  law  should  be  passed  to  punish  those  who  are 
guilty  of  the  destruction  of  property,  also  that  a  law  should  be  passed  to  mete 
out  severe  punishment  to  those  who  send  out  these  notices  as  referred  to 
above.  We  also  desire  to  say  to  you  that  if  you  so  wish  we  will  furnish  you  with 
names  of  those  who  have  received  Night  Rider  notices,  supported  by  their 
affidavit  as  to  their  receiving  same  and  that  they  ,desire  protection  from  the 
State  along  the  lines  set  out  herein,  as  there  have  already  been  two  barns 
burned  in  Spencer  County  about  four  weeks  ago  on  the  same  night,  origin 
of  which  is  mysterious  and  unknown. 

Respectfully  submitted, 
(Signed)  T.   R.    HARDY, 

ALLEN    PAYTON, 
J.  J.  BROWN. 


207 
"NIGHT  RIDER"  SITUATION  IN  INDIANA. 


SEPTEMBER  24,  1908. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives  : 

The  resolution  of  the   House  of  Representatives,   requesting 
"more  specific  information"  relative  to  the  situation  in  the  tobacco 
district  of  the  State  and  to  certain  expenditures  made  from  the 
Governor's  contingent  fund,  has  been  received  and  considered. 
(Remainder  of  message  similar  to  that  to  the  Senate,  p.  201.) 

CHARGES  MADE  BY  LUTHER  W.  KNISELY. 


SEPTEMBER  29,  1908. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  am  advised,  through  the  press  of  this  date,  that  Luther  W. 
Knisely,  a  member  of  the  House  of  Representatives,  has  sworn  to 
and  published  the  following  statement: 

"I,  Luther  W.  Knisely,  a  representative  in  the  General  Assembly  of  the 
State  of  Indiana  from  the  county  of  Dekalb,  and  as  such  being  in  Indianapolis 
in  attendance  upon  the  special  session  of  said  General  Assembly,  on  the 
morning  of  September  26,  1908,  do  state  under  oath  that  upon  the  said  morn- 
ing of  said  date  and  twenty  minutes  before  the  House  convened  Senator 
Wick  wire  came  to  me  and  took  me  .and  wanted  an  interview.  He  made  me 
the  proposition  that  if  I  would  vote  for  the  county  local  option  bill  I  could 
have  a  position.  I  asked  him  what  kind  of  a  position.  He  said  the  position 
would  pay  from  $700  a  year  up  to  $2,000  and  better,  according  to  my  ability 
to  fill  the  same. 

I  made  the  statement  to  him  that  he  had  no  authority  to  give  these 
positions.  He  wanted  to  know  if  I  would  accept  any  higher  authority.  I 
said  I  could  consider  the  matter  and  went  back  to  the  House.  About  ten 
minutes  before  the  House  opened  Senator  Wickwire  came  to  me  and  took 
me  to  Governor  J.  Frank  Hanly,  who  conducted  me  into  his  private  office. 
There  the  Governor  requested  me  to  vote  for  the  county  local  option  bill, 
saying  that  if  I  would  I  would  be  well  taken  care  of.  I  said:  'Governor, 
I  am  a  democrat;  if  you  were  put. in  my  chair  and  I  in  yours,  what  would 
you  do  in  this  case?'  He  answered:  'I  would  most  certainly  accept.'  He 
also  said:  'Knisely,  this  is  the  opportunity  of  your  life.'  I  answered:  'I  beg 
to  differ  with  you.'  Then  the  conference  ended  and  I  returned  immediately 
to  the  House  chamber." 

I  am  also  advised,  through  the  public  press,  that  Mr.  Knisely 
is  advising  against  any  investigation  of  his  charge  by  the  House. 


208 

The  charge  made  is  a  grave  one.  It  involves  the  honor  of  the 
House  of  Representatives,  the  honor  of  a  member  of  the  Senate, 
and  the  honor  of  the  Governor  of  the  State  of  Indiana.  The  facts 
relating  to  this  charge  should  be  known  by  the  House.  If  they 
are  true,  I  ought  to  be  impeached  and  removed  from  office.  If 
they  are  false,  I  am  entitled  that  their  falsity  should  be  disclosed. 

Knowing  that  the  charge  is  wickedly  and  maliciously  false  and 
without  any  foundation  or  semblance  of  truth,  I  deem  it  my  duty 
to  call  your  attention  thereto  and  to  request  that  a  committee  be 
appointed,  with  power  to  send  for  persons  and  papers  and  to  ad- 
minister oaths,  to  make  full  and  complete  investigation  of  said 
charge,  and  return  the  facts  to  this  House  for  such  action  as  in 
its  judgment  shall  be  proper  in  the  light  of  the  facts  disclosed. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


Senate  Veto  Messages,  Sixty-Fourth 
General  Assembly 


[14—19891]  ,209| 


211 
SENATE  BILL  No.  48. 


FEBRUARY  20,  1905. 

Mr.  President  and  Gentlemen  of  the  Senate: 

I  return  herewith  Senate  Bill  No.  48  without  my  approval. 
I  do  so  with  reluctance  and  regret,  for  I  am  conscious  that  my  act 
may  be  criticised  by  some  of  the  persons  whom  it  is  attempted  to 
make  beneficiaries  under  the  bill.  I  have,  also,  a  sincere  and  pro- 
found appreciation  of  the  services  rendered  by  the  soldiers,  sailors 
and  marines  of -the  country.  Their  valor  and  sacrifices  saved  and 
preserved  the  integrity  of  the  republic  and  carried  its  flag  in  a 
march  of  glory  around  the  world. 

But  for  the  fact  that  my  duty  to  the  State  precluded  my  doing 
so  I  would  have  gladly  signed  this  bill.  After  the  best  thought  of 
which  I  am  capable,  however,  I  am  compelled  to  believe  that  the 
good  of  the  public  service  and  the  welfare  of  the  institutional  life 
of  the  State,  penal  and  benevolent,  require  that  the  measure  should 
not  become  a  law.  I  have  therefore  preferred  to  accept  the  hazard 
of  criticism  rather  than  lack  the  courage  to  do  what  has  seemed 
to  me  to  be  a  plain  public  duty. 

The  bill  provides  that  any  honorably  discharged  soldier,  sailor 
or  marine  of  the  United  States,  who  is  a  resident  of  Indiana,  and 
who  makes  application  for  appointment,  and  who  served  in  the 
Civil  War,  the  war  with  Spain  or  the  war  in  the  Philippines,  and 
who 

"is  honest  and  competent,  shall  be  given  the  preference  for  any  appoint- 
ment to  be  made  by  whatever  administrative  authority  conferred  by  the 
State  of  Indiana  to  any  position  paying  not  more  than  ninety  dollars  per 
month  in  any  penal  institution,  benevolent  institution,  public  building  or  other 
institution  or  employment  maintained  or  conducted  by  the  State  of  Indiana." 

This  would  compel  the  appointing  power  to  appoint  them  in 
every  such  instance,  or,  by  the  act  of  non-appointment,  to  brand 
them  either  as  dishonest  or  incompetent.  Failure  to  appoint  them 
could  be  justified,  under  the  law,  solely  upon  the  ground  that  they 
are  either  dishonest  or  incompetent.  I  cannot  sign  an  act  that 
would  compel  me  to  do  that. 

It  will  be  observed  that  the  proposed  law  does  not  require  the 
preference  to  be  given  to  the  class  named  where  their  qualifications 
are  equal  to  the  qualifications  of  other  citizens,  but  whenever  they 
are  applicants  and  are  "honest  and  competent." 


212 

"Competent"  is  defined  by  the  Century  Dictionary  to  mean 
-I Living  ability  or  capacity."  There  are  degrees  of  competency, 
degrees  of  ability,  and  degrees  of  capacity.  Ten  men  are  appli- 
cants for  a  position ;  all  of  them  may  be  competent ;  all  of  them 
may  have  ability  ;  and  all  of  them  may  have  capacity ;  but  some  of 
them  arc  more  competent,  have  greater  ability  and  possess  greater 
capacity  than  some  of  the  others ;  and  of  the  ten,  one  is  most  com- 
petent, has  the  greatest  capacity  and  possesses  the  greatest  ability 
of  all  the  ten.  In  such  a  case  he  is  the  one  of  all  the  ten  who  ought 
to  be  appointed,  for  the  welfare  of  the  State  and  the  good  of  the 
public  service  of  of  the  institution  the  control  of  which  he  is  to 
assume.  Under  the  proposed  legislation  he  could  not  be  appointed 
if  any  one  of  the  ten  applicants  happened  to  be  an  "honest"  sol- 
dier, marine  or  sailor  who  is  competent  to  discharge  the  duties  of 
the  position,  though  it  stands  confessed  that  such  soldier,  marine 
or  sailor  is  the  least  competent  of  all  the  ten  applicants. 

It  is  now  forty  years  since  the  Civil  War  closed  and  the  armies 
of  Grant  and  Sherman  returned  to  civil  life — more  than  an  av- 
erage lifetime.  Few  survivors  of  that  war  are  today  under  sixty 
years  of  age.  Physical  and  mental  infirmities  have  impaired  in 
many  instances  both  body  and  mind. 

The  above  language  limits  the  appointing  power  of  the  entire 
executive  and  administrative  departments  of  the  State  in  making 
appointments  to  any  positions  in  the  service  of  the  State  where 
the  compensation  is  not  more  than  ninety  dollars  per  month,  to 
soldiers,  sailors  and  marines  of  the  United  States,  who  served  in 
either  of  the  wars  named,  whenever  any  such  soldier,  sailor  or  ma- 
rine, who  is  "honest  and  competent,"  is  an  applicant. 

If  the  class  of  citizens  named  in  this  bill  are  entitled  to  appoint- 
ment to  all  positions  in  the  public  services  where  the  compensation 
is  not  more  than  ninety  dollars  per  month,  upon  application  made 
by  any  of  them  who  are  "honest  and  competent,"  then  they  are 
equally  entitled  to  appointment  to  all  positions  in  the  public  serv- 
ice upon  application  made  by  any  of  them  who  are  "honest  and 
competent,"  however  great  the  compensation  or  arduous  and  diffi- 
cult the  duties  of  such  positions. 

I  do  not  understand  why  an  arbitrary  limitation  to  positions 
paying  not  more  than  ninety  dollars  per  month  has  been  made. 
It  cheapens  the  class  of  citizens  it  seeks  to  befriend,  and  is  in  effect 
a  legislative  declaration  that  the  public  services  of  all  such  citizens 
are  limited  in  value  to  less  than  ninety  dollars  per  month — a 
declaration  in  which  I  decline  to  join. 


213 

Should  this  bill  become  a  law  every  appointment  made  in  any 
of  the  institutions  of  the  State  where  the  compensation  is  not  more 
than  ninety  dollars  per  month;  every  member  of  every  board  of 
trustees,  board  of  control  or  board  of  managers  of  any  such  in- 
stitutions ;  every  member  of  every  police  board  in  every  city  op- 
erating under  the  metropolitan  police  law  of  the  State ;  and  every 
appointive  position  in  every  department  of  the  State  government 
not  paying  more  than  ninety  dollars  per  month,  would  have  to  be 
made  from  ex-soldiers,  sailors  or  marines  of  the  United  States,  if 
any  such  were  applicants  for  appointment  and  any  of  such  appli- 
cants were  "honest  and  competent." 

While  many  of  them  are  still  entirely  competent  to  discharge 
the  duties  of  any  position  included  within  the  provisions  of  this 
bill,  many  thousands  of  them  are  competent  to  do  so  only  in  a  lim- 
ited sense,  and  have  certainly  ceased  to  be  the  most  competent  per- 
sons for  such  positions.  Not  all,  but  many  of  them,  lack  the 
strength  and  fiber,  the  tenacity  of  purpose,  the  firmness  of  will 
and  the  grasp  of  large  affairs  essential  to  the  most  capable  and 
efficient  administration  of  the  great  penal  and  benevolent  institu- 
tions of  the  State — institutions  requiring  the  expenditure  and  han- 
dling of  hundreds  of  thousands  of  dollars  of  public  funds  each 
year.  Yet  the  boards  of  control  of  all  these  institutions,  under  the 
provisions  of  this  bill,  would  have  to  be  made  up  of  soldier,  sailor 
and  marine  applicants  if  they  were  "honest  and  competent,"  though 
they  were  far  less  competent  than  thousands  of  other  and  younger 
men  in  the  State,  whose  services  could  be  had  if  the  executive  or 
appointing  power  were  left  free  to  select  from  the  entire  body  of 
our  citizenship. 

This  administration  will  not  be  satisfied  with  merely  competent 
men  for  these  State  institutions.  It  insists  upon  having  the  privi- 
lege of  selecting  the  most  competent  and  the  best  men  for  these  po- 
sitions afforded  by  our  entire  citizenship,  if  such  men  can  be  in- 
duced to  enter  such  service. 

Every  one  upon  whom  the  responsibility  of  these  appointments 
has  ever  rested  has  found  the  field  from  which  to  select  none  too 
large,  though  he  had  the  whole  body  of  citizens  from  which  to 
make  selection. 

Then,  too,  the  public  service  ought  to  be  open  to  all  men  and 
the  State  ought  not  to  be  deprived  of  the  services  of  its  best  and 
most  capable  citizens  by  any  limitation  whatever.  This  is  espe- 
cially true  of  the  State  institutions  mentioned.  If  there  be  any 
citizens  whose  services  to  the  country  in  time  of  war  and  whose  fit- 


214 

ness  for  these  positions  justify  the  partiality  of  the  appointing 
power,  and  they  are  found  to  be  willing  to  accept  positions  in  the 
public  service,  this  administration  will  be  only  too  glad  to  avail 
itself  of  their  services  and  thereby  recognize  the  services  they  have 
already  rendered  in  behalf  of  the  country  on  the  field  of  battle. 

Another  well-known  fact  to  those  who  have  had  experience  in 
public  affairs  touching  the  management  of  our  State  institutions 
is  that  the  best  and  most  competent  persons,  those  who  possess  the 
highest  qualifications  for  positions  on  the  institutional  boards,  are 
rarely  found  among  those  who  are  applicants  for  appointment 
thereto.  The  necessity  of  going  outside  of  all  applicants  and  of 
selecting  men  whose  character,  habits  and  peculiar  ability  give  them 
special  fitness  for  such  positions,  has  been  felt  by  every  man  who 
has  occupied  a  position  with  appointive  power. 

In  some  instances  I  have  already  gone  outside  of  all  applicants 
and  selected  persons  whom  I  have  believed  to  have  a  special  fitness 
for  the  position  in  question,  and  I  hope  to  do  so  many  times  during 
this  administration,  unless  prevented  by  restrictions  laid  upon 
me  by  legislative  action. 

If  I  can  find  such  men  among  the  soldiers,  sailors  and  marines 
of  the  wars  named,  I  shall  be  glad  indeed  to  recognize  their  serv- 
ices to  the  country  in  the  hour  of  its  need  and  appoint  them.  But 
if  I  cannot,  I  shall  unhesitatingly  make  selection  of  others,  feeling 
that  in  so  doing  I  am  only  discharging  my  duty  to  the  State  whose 
servant  I  am.  The  administration  ought  to  be  left  free  to  call  to 
its  aid  the  services  of  the  most  competent  men  in  the  State  without 
regard  to  past  military  service. 

In  vetoing  this  bill  I  am  simply  saving  to  one  of  the  States  of 
the  republic  the  Union  soldiers,  sailors  and  marines  fought  to  save, 
the  opportunity  of  obtaining  the  highest  and  best  possible  admin- 
istration of  its  public  affairs.  The  motive  that  prompts  me  to  do 
it  does  not  widely  differ  from  the  motives  which  prompted  the  sol- 
diery of  the  country  to  the  performance  of  its  duty  in  the  years 
gone  by. 

Respectfully  submitted, 

J.  FRANK  HANLY,     • 
Governor. 


215 
SENATE  BILL  No.  80. 


FEBRUARY  20,  1905. 
Mr.  President  and  Gentlemen  of  the  Senate: 

I  return  herewith  Senate  Bill  No.  80  without  my  approval. 
The  law  as  it  now  is  provides  adequate  redress  for  every  substan- 
tial injury  to  the  peaceful  possession  or  quiet  enjoyment  of  the 
home  or  property  of  any  citizen  arising  from  the  maintenance  of 
a  private  nuisance. 

If  such  peaceful  possession  or  quiet  enjoyment  is  impaired  in 
any  substantial  degree,  by  anything  which  is  in  fact  a  nuisance 
maintained  by  an  adjoining  property  owner,  damages  may  be  re- 
covered and  the  maintenance  of  such  nuisance  enjoined  under  ex- 
isting law  in  any  court  of  competent  jurisdiction  in  the  State. 
There  must,  of  course,  be  substantial  invasion  either  of  such  pos- 
session or  of  such  enjoyment,  and  the  thing  sought  to  be  enjoined 
or  abated  must  be  a  nuisance  in  fact  before  an  action  for  damages 
or  injunction  will  lie.  This  is  as  it  should  be.  The  law  is  right  as 
it  is. 

The  bill  returned  herewith  makes 

"any  fence  or  other  structure  in  the  nature  of  a  fence  unnecessarily  exceed- 
ing six  feet  in  height,  maliciously  erected  or  maintained  for  the  purpose 
of  annoying  an  owner  or  an  occupant  of  an  adjoining  property," 

a  private  nuisance  per  se,  whether  it  be  so  in  fact  or  not,  or  whether 
or  not  there  is  in  fact  any  impairment  of  such  adjoining  owner's 
possession  or  enjoyment  of  his  property. 

Actual  injury  to,  or  impairment  of,  such  possession  or  enjoy- 
ment by  such  adjoining  owner,  is  not  a  necessary  element  at  all 
under  Section  1  of  the  bill.  The  only  elements  necessary  to  con- 
stitute the  fence  or  structure  a  nuisance  are,  an  unnecessary  height 
of  more  than  six  feet,  a  malicious  purpose  in  the  mind  of  the  per- 
son erecting  or  maintaining  such  fence  or  structure,  and  a  purpose 
to  annoy  the  owner  of  the  adjoining  property.  Such  a  fence  or 
structure  maintained  with  such  a  purpose  is  declared  to  be  a  nuis- 
ance per  se,  and  an  action  will  lie  though  such  fence  or  structure 
results  in  no  injury  or  impairment  whatever  to  the  possession  or 
enjoyment  of  the  adjoining  owner's  property. 

The  proposed  law  is  wholly  unnecessary  and  is  petty  in  char- 
acter. It  is  calculated  to  engender  ill-will  and  to  intensify  existing 
and  trivial  differences  between  neighbors,  and  will  tend  to  multiply 


216 

frivolous  and  spiteful  litigation  between  persons  who  ought  to  be 
friends. 

Section  3  of  the  bill  contains  a  declaration  of  an  emergency 
for  the  immediate  taking  effect  of  the  act  upon  and  from  its  pas- 
sage. An  emergency  clause  has  no  justification  in  a  bill  such  as  this. 
By  it  the  bill  makes  unlawful  today  what  was  lawful  yesterday,  and 
gives  the  citizen  no  opportunity  to  conform  to  the  change  in  the 
law.  It  makes  it  possible  to  bring  an  offending  citizen  into  court 
the  moment  the  passage  of  the  bill  is  completed  by  executive  ap- 
proval. The  bill  creates  a  new  cause  of  action  and  imposes  new 
liabilities  instantly  and  without  warning.  This  ought  not  to  be 
done. 

An  emergency  for  the  immediate  taking  effect  of  an  act  from 
and  upon  its  passage  ought  rarely,  if  ever,  to  be  declared  where 
the  act  carries  a  penalty  for  its  violation,  imposes  a  forfeiture, 
or  makes  unlawful  an  existing  deed  or  thing  which  was  lawful  be- 
fore the  passage  of  such  act. 

Under  the  Constitution  of  the  State  the  General  Assembly  has 
authority  to  declare  the  existence  of  an  emergency  for  the  imme- 
diate taking  effect  of  a  legislative  act.  But  it  ought  not  to  do  so 
arbitrarily.  There  should  exist  some  reason  for  such  declaration, 
and  where  no  emergency  does  in  fact  exist,  none  should  be  declared 
to  exist.  There  is  absolutely  no  emergency  of  which  I  have  been 
able  to  learn  for  the  immediate  taking  effect  of  this  act. 

The  act  of  legislation,  under  the  Constitution  of  this  State,  is 
not  complete — the  passage  of  a  bill  is  not  accomplished — until  it 
receives  executive  approval,  or,  having  received  executive  disap- 
proval is  passed  by  the  General  Assembly  notwithstanding  such  dis- 
approval. There  being  in  fact  no  emergency  for  the  immediate  ta- 
king effect  of  the  act  in  question,  and  the  act  itself  being  of  doubt- 
ful propriety,  creating  a  new  cause  of  action  and  providing  for 
penalties  for  its  violation,  I  cannot  join  in  the  arbitrary  declara- 
tion of  the  existence  of  an  emergency. 

I  have  given  more  consideration  in  this  message  to  the  bill  than 
its  importance  deserves;  but  I  have  done  so  in  the  hope  that  the 
General  Assembly  may  be  induced  to  adopt  a  more  conservative 
course  in  declaring  an  emergency  for  the  immediate  taking  effect 
of  measures,  when  in  fact  no  such  emergency  exists,  or  where  the 
measures  create  new  causes  of  action,  or  carry  penalties  for  their 
violation,  or  impose  forfeitures. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


217 
SENATE  BILL  No.  17. 


FEBRUARY  23,  1905. 

Mr.  President  and  Gentlemen  of  the  Senate : 

I  return  herewith  Senate  Bill  No.  17  without  my  approval. 
The  bill  seeks  to  legalize  a  certain  gravel  road  proceeding  in  Or- 
ange County,  to  validate  the  bonds  issued  therein  and  the  assess- 
ments made  for  the  creation  of  a  fund  with  which  to  retire  such 
bonds.  The  measure  is  special  and  local  in  its  character.  It  has 
application  to  but  one  county  in  the  State  and  to  a  particular  pro- 
ceeding in  that  county,  and  involves  the  assessment  and  collection 
of  taxes  for  road  purposes  to  the  extent  that  it  seeks  to  validate 
the  bonds  issued  and  the  assessments  levied  for  their  retirement. 

Section  22  of  Article  4  of  the  Constitution  of  the  State  pro- 
vides : 

"The  General  Assembly  shall  not  pass  local  or  special  laws  in  any  of  the 
following  enumerated  cases,  that  is  to  say  *.  For  laying  out,  opening 

and  working  on  highways    *     *    *.     For  the  assessment  and  collection  of  taxes 
for     *     *     *     road  purposes." 

As  the  case  sought  to  be  reached  by  the  bill  now  stands,  the 
bonds  issued  in  the  proceedings  sought  to  be  affected  are  invalid, 
and  the  assessments  are  also  invalid,  because  of  errors  in  said  pro- 
ceedings. 

The  measure  under  consideration  is  forbidden  by  the  Constitu- 
tion. It  is  an  attempt  to  validate  said  proceedings,  said  bonds  and 
said  assessments.  It  is,  therefore,  in  effect,  an  attempt  to  authorize 
an  assessment  and  collection  of  taxes  for  road  purposes  by  an  act 
local  and  special  in  character,  and  is  clearly  within  the  constitu- 
tional inhibition. 

The  question  here  involved  has  recently  had  the  consideration 
of  the  Supreme  Court  of  the  State  in  the  case  of  Board  v.  Span- 
gler,  reported  in  the  159  Ind.  579,  where  the  unconstitutionally  of 
a  like  statute  is  declared. 

In  that  case  a  proceeding  for  the  establishment  of  a  free  gravel 
road  in  Owen  County  was  pending  at  the  time  the  act  of  February 
7,  1899,  limiting  the  issue  of  bonds  or  other  evidence  of  indebted- 
ness for  the  construction  of  free  gravel  or  macadamized  roads  to 
four  per  centum  of  the  total  valuation  of  the  taxable  property  of 
the  township,  became  a  law.  On  March  4,  1899,  an  act,  containing 
an  emergency,  was  passed,  exempting  proceedings  in  counties  hav- 


218 

ing  a  population  between  15,000  and  15,050,  and  which  were  pend- 
ing at  the  time  of  the  taking  effect  of  the  first  act,  from  the  pro- 
visions of  said  act. 

Afterward,  relying  upon  the  validity  of  said  act  of  March  4, 
1899,  a  contract  was  let  in  said  gravel  road  proceedings  in  Owen 
County  for  a  sum  in  excess  of  four  per  centum  of  the  taxable  valu- 
ation of  the  property  of  the  township  in  which  such  road  was 
located. 

In  1901  the  General  Assembly  passed  a  curative  act,  solely  ap- 
plicable to  said  proceedings  in  Owen  County,  by  which  all  of  said 
proceedings  and  said  bonds  were  declared  validated. 

In  the  bill  returned  herewith  said  proceedings  in  Orange 
County,  including  the  contract,  the  bonds  and  the  assessments,  arc 
sought  to  be  validated  substantially  as  it  was  sought  by  the  act  of 
1901  to  validate  the  contract,  the  bonds  and  the  assessments  in 
the  Owen  County  proceedings. 

In  the  Owen  County  case  the  court  held  that  while  Owen 
County  was  not  mentioned  by  name  in  the  act  of  March 
4,  1899,  the  court  would  take  judicial  notice  of  the  fact  that 
such  act  applied  to  Owen  County  alone,  it  being  the  only  county  in 
the  State  having  a  population  between  15,000  and  15,050,  and 
that  the  act,  in  effect,  sought  to  provide  that  the  provisions  of  the 
general  act  of  February  7,  1899,  limiting  the  issue  of  bonds, 
should  not  apply  to  certain  described  proceedings  to  improve 
gravel  roads  in  the  county  of  Owen. 

In  passing  upon  the  validity  of  the  act  of  March  4,  1899,  the 
court  said : 

"The  attempted  exclusion  of  pending  proceedings  for  the  improvement 
of  gravel  roads  in  Owen  County  from  the  operation  of  the  general  law  pro- 
hibiting an  issue  of  bonds  for  gravel  road  purposes  in  excess  of  four  per 
centum  of  the  taxable  valuation  of  property  of  the  township,  was  in  effect  an 
attempt  to  provide  by  a  local  law  not  alone  for  an  issue  of  bonds,  but  for 
the  levy  of  a  tax  that,  under  existing  law,  constitutes  the  means  of  retiring 
such  bonds.  We  think  that  it  was  not  competent  for  the  General  Assembly 
to  make  such  exception.  The  act  of  March  4,  1899,  does  not  purport  to  be 
a  curative  act,  and  it  is  not  curative  in  the  sense  of  attempting  to  validate 
a  past  proceeding,  but  we  think  that  its  validity  is  to  be  tested  by  the  con- 
siderations that  are  applicable  to  statutes  that  purport  to  be  curative.  In 
cases  where  it  would  have  been  originally  competent  for  the  General  Assembly 
to  have  authorized  particular  proceedings  upon  the  part  of  a  board  or  other 
official,  the  same  source  of  power  may  ordinarily  validate  the  proceedings; 
but  unless  the  General  Assembly  had  the  power  to  have  authorized  the  pro- 
ceedings originally  by  an  act  that  in  its  substance  would  have  been  of  the 
same  character  as  the  curative  act,  then  the  curative  act  would  be  invalid. 


219 

Walsh  v.  State,  ex  rel.,  142  Ind.  357,  33  L.   R.  A.  392;    Schneck  v.  City  of 
Jeffersonville,   152   Ind.  204. 

The  act  of  February  7,  1899,  was  general  in  its  character,  and  if  it 
had  contained  an  exception  that  excluded  from  its  operation  proceedings 
generally  that  were  then  pending,  we  take  it  that  it  would  not  have  thereby 
lost  its  general  character.  It  cannot,  however,  be  contended  with  any  show 
of  reason  that  it  would  have  been  competent  to  have  limited  said  act  so  as  to 
exclude  from  its  operation  proceedings  to  improve  highways  in  Owen  County, 
thereby  legislating  for  Owen  County  in  such  particular.  This  is  in  substance 
what  it  was  sought  to  do  by  the  act  of  March  4,  1899.  As  the  subject  of  the 
legislation  falls  within  Sec.  22,  of  Article  4,  of  the  State  Constitution,  we  hold 
that  the  proceedings  could  not  be  validated  by  any  act  that  could  properly 
be  characterized  as  local  or  special." 

The  curative  act  of  1901  was  also  held  invalid  for  like  reason. 
In  speaking  of  that  act,  the  court  said : 

"The  act  of  1901  is  also  invalid.  The  attempts  to  validate  the  contract 
and  the  assessment  of  taxes  to  pay  the  bonds  upon  their  maturity  were 
abortive,  because  of  the  special  and  local  character  of  the  act;  and  as  it  is  not 
to  be  presumed  that  the  issue  of  bonds  would  have  been  declared  validated 
by  the  General  Assembly,  had  it  been  advised  that  there  was  no  power  to 
retire  such  bonds  in  the  manner  proposed,  the  entire  act  must  be  regarded  as 
a  nullity." 

I  believe  the  above  case  is  decisive  of  the  question  involved  in 
the  bill  returned  herewith;  that  it  is  controlling  upon  both  the 
legislative  and  executive  departments  of  government,  and  there- 
fore precludes  me  from  giving  it  my  approval. 

It  is,  perhaps,  proper,  however,  to  suggest  that  the  relief 
sought  by  this  bill  is  not  improper,  and  that  a  general  measure 
validating  all  gravel  road  proceedings  in  the  State,  where  the  de- 
fects in  such  proceedings  are  only  technical  in  character,  would 
be  a  valid  exercise  of  the  legislative  power. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


220 
SENATE  BILL  No.  160. 


FEBRUARY  27>  1905. 

Mr.  President  and  Gentlemen  of  the  Senate: 

I  return  herewith  Senate  Bill  No.  160  without  my  approval. 
This  bill  provides  for  the  reimbursement  of  Henry  J.  Hostettler, 
late  trustee  of  Clear  Spring  township,  Lagrange  County,  out  of 
the -public  funds  of  said  township,  for  certain  moneys  of  such 
township  coming  into  his  hands  as  such  trustee,  and  by  him  de- 
posited in  a  certain  banking  institution,  which  moneys  were  lost 
to  him  through  the  failure  of  such  institution,  and  which  amounted 
to  the  sum  of  $1,812.00. 

Other  bills  providing  for  the  reimbursement  of  other  public 
officials  of  Lagrange  County,  for  public  moneys  lost  in  like  man- 
ner, have  received  the  sanction  of  the  General  Assembly.  The  ag- 
gregate appropriation  of  public  funds  belonging  to  the  citizens 
of  this  county  made  by  bills  already  passed  exceeds  $3,400.00. 

Similar  bills  for  the  relief  of  certain  other  township  and  county 
officers  of  Elkhart,  Dekalb,  Laporte,  Jasper  and  Steuben  counties, 
on  account  of  similar  losses,  have  passed  both  houses  of  the  Gen- 
eral Assembly.  The  aggregate  appropriations  of  the  funds  of 
these  several  counties  and  the  several  townships  thereof,  made  by 
the  several  measures  already  passed,  are  more  than  $65,000.  This 
is  a  goodly  sum  to  give  away.  And  yet,  as  shown  by  the  calen- 
dars of  the  respective  houses  of  the  General  Assembly,  other  meas- 
ures having  like  provisions  and  like  purposes  are  far  on  their  way 
toward  legislative  approval. 

I  am  unable  to  state  with  accuracy  the  amount  of  the  aggre- 
gate appropriations  carried  by  these  several  pending  bills,  but  the 
grand  total  of  such  appropriations  made  by  these  bills,  passed  and 
pending,  is  startling  in  amount  and  is  certainly  sufficient  to  chal- 
lenge the  thoughtful  consideration  of  every  member  of  the  Gen- 
eral Assembly. 

The  character  of  this  legislation,  the  number  of  public  officials 
relieved  of  just  and  solemn  obligations,  and  the  great  sum  of 
money  appropriated  by  it  in  the  aggregate  from  the  treasuries 
of  the  several  townships  and  counties  affected  and  placed  in  the 
pockets  of  private  individuals  as  a  gift,  have  caused  me  to  con- 
sider with  thoughtful  care  two  questions  which  seem  to  me  to  go 
to  the  very  heart  of  each  of  these  measures. 


221 

First.  Docs  sound  public  policy  admit  of  such  an  appropria- 
tion of  the  public  funds  of  a  township  or  county? 

Second.  Is  such  legislation  inhibited  by  the  Constitution  of 
the  State? 

I  am  compelled  to  answer  the  first  of  these  questions  in  the  nega- 
tive. A  public  policy  which  relieves  from  liability  a  public  official 
who  makes  a  deposit  of  public  funds  entrusted  to  his  care  in  a  bank 
which  fails,  and  in  which  failure  such  funds  are  lost  to  him,  is  un- 
sound and  dangerous.  If  such  policy  be  generally  adopted  and 
long  continued,  it  will  inevitably  beget  loose  and  careless  adminis- 
tration, multiply  such  losses  and  mulct  the  people  d'lily  by  the  use 
of  public  funds  raised  by  taxation  to  recoup  private  losses. 

Between  the  trustee  named  as  the  beneficiary  in  the  bill  re- 
turned herewith  and  the  people  of  his  township  there  was  an  im- 
plied contract.  A  contract  none  the  less  binding  and  sacred  be- 
cause it  was  unwritten.  On  his  part  this  contract  required  him 
to  faithfully  discharge  his  duties  as  such  official  and  account  to 
his  township  for  all  moneys  belonging  to  such  township  and  coming 
into  his  hands.  On  the  people's  part  it  required  them  to  pay  him 
the  salary  fixed  by  law.  Then,  in  addition,  that  the  assurance  on 
the  part  of  the  trustee  might  not  fail,  the  law  required  from  him 
a  solemn  and  binding  written  contract  with  surety  that  he  would 
faithfully  discharge  his  duties  and  account  for  all  moneys  be- 
longing to  his  township  which  should  come  into  his  hands.  The 
amount  of  money  received  by  him  measured  his  liability.  He  was 
bound,  as  a  public  officer,  to  keep  the  funds  in  his  hands  safely.  He 
was,  in  fact,  an  insurer  of  the  safety  of  the  funds  in  his  hands 
and  was  bound  to  account  for  the  moneys  lost  by  him,  though  lost 
without  his  fault. 

Good  morals  and  a  sound  public  policy  require  that  these  con- 
tracts, both  the  implied  and  the  written  one,  shall  be  kept,  and 
that  there  shall  be  no  impairment  of  either  of  them,  and  that  there 
shall  be  no  relief  from  the  penalties  by  them  imposed. 

When  the  beneficiary  named  in  this  bill  sought  and  obtained  his 
office  he  knew  the  obligation  he  would  be  required  to  assume.  He 
knew,  also,  the  hazards  he  would  incur,  and  that  the  extent  of  his 
liability  would  be  measured  by  the  amount  of  money  coming  into 
his  hands.  Knowing  this  he  was  not  deterred  from  accepting  his 
trust.  On  the  contrary,  he  chose  to  qualify  and  to  enter  upon  the 
discharge  of  his  duties  as  such  trustee. 

Having  entered  upon  the  discharge  of  such  duties,  he  was  not 
compelled  by  any  public  necessity  to  withdraw  in  bulk  the  funds 


222 

due  his  township  from  the  county  treasury.  He  could  have  left 
them  there  until  required  for  public  use.  While  such  funds  were 
in  the  county  treasury  he,  as  township  trustee,  would  have  carried 
no  hazard  of  their  loss,  nor  would  he  have  incurred  any  liability  had 
they  been  lost  while  in  such  treasury.  He  chose  to  remove  them  in 
bulk  and  in  larger  sums  than  public  necessity  required  and  to  place 
them  on  deposit  in  a  bank  of  his  own  choice.  The  bank  failed. 
The  loss  of  funds  so  deposited  was  his  individual  loss.  The  deposit 
of  such  funds  in  such  bank  was  his  affair  and  not  the  public's. 
Knowing  the  law,  he  chose  to  carry  the  hazard,  to  assume  the  risk 
and  to  accept  any  liability  consequent  upon  the  loss  of  any  part 
of  such  funds,  and  now,  that  such  loss  has  come  upon  him,  he  is 
in  no  position  to  ask  relief  from  the  requirements  imposed  upon 
him  by  the  law.  He  has  no  claim,  either  moral,  legal  or  equitable. 

As  to  the  second  question,  the  inhibition  of  the  Constitution 
against  such  measures  as  these,  the  law  is  too  clear  to  admit  of  seri- 
ous debate. 

The  decision  of  the  Supreme  Court  in  the  case  of  Mount,  Trus- 
tee, v.  The  State,  ex  rel.  Richey,  90  Ind.  29,  has  been  cited  in  sup- 
port of  the  constitutionality  of  the  bill  by  its  friends  and  by  the 
friends  of  the  several  kindred  measures  hereinbefore  referred  to. 
I  have  given  consideration  to  that  decision.  It  was  written  by  a 
learned  and  eminent  judge,  in  whose  ability  and  learning  I  have 
very  great  confidence.  The  decision  is  in  point  and  the  bill  is 
clearly  within  the  rules  therein  declared,  in  so  far  as  it  seeks  to  re- 
imburse-the  beneficiary  on  account  of  public  funds  lost  by  him,  but 
it  is  not  in  point  and  the  provisions  of  the  bill  are  not  within  the 
rules  of  the  decision  in  the  case  named  in  so  far  as  it  seeks,  by 
direct  provision,  to  relieve  such  beneficiary  and  the  sureties  on  his 
official  bond  and  discharge  them  from  any  and  all  liability  on  ac- 
count of  such  bond  for  the  payment  of  the  money  due  the  said 
township  from  such  beneficiary. 

I  am  thoroughly  convinced,  howrever,  that  the  decision  is  wrong 
in  principle;  that  it  is  opposed  to  the  great  weight  of  judicial 
decision  upon  the  question  involved;  that  it  rests  upon  a  false 
premise,  involving  mixed  questions  of  law  and  fact;  and  that  it 
has  been  modified,  if  not  overruled  by  implication,  in  a  subsequent 
decision  of  the  Supreme  Court,  and  that  it  has  ceased  to  be  the  law. 
And  I  am  quite  as  thoroughly  persuaded  that  it  never  ought  to 
have  been  the  law. 

The  bill  is  silent  upon  the  question  as  to  whether  or  not  the 
trustee  sought  to  be  relieved  has  paid  to  his  township  the  moneys 


223 

lost  by  him.  If  he  has  paid  the  township  the  money  lost,  he  occu- 
pies to  his  township,  as  to  such  money,  the  position  neither  of 
debtor  nor  creditor.  He  has  no  right  in  law  or  in  equity  to  the  re- 
turn of  his  money.  In  the  absence  of  special  legislation  for  the 
purpose  such  money  cannot  be  returned  to  him.  A  return  of,  it 
would  amount  to  nothing  but  a  gift,  pure  and  simple,  a  gift,  too, 
of  public  money  for  a  private  purpose. 

That  the  General  Assembly  has  no  constitutional  power  to 
make  an  appropriation  of  public  funds  raised  by  taxation  to  a 
private  purpose  is  agreed  by  all  authorities.  This  is  conceded  in 
the  decision  in  the  90th  Ind.,  above  cited.  On  this  point  I  submit 
the  language  of  the  decision: 

"It  is,  perhaps,  true  that  the  legislature  cannot  authorize  the  assessment 
of  a  tax  for  a  mere  private  purpose  *  *  *." 

The  writer  of  the  opinion  states  the  basis  of  the  decision  as 
follows : 

"Reimbursing  a  public  officer  for  the  loss  of  public  funds,  occurring  while 
he  is  engaged  in  discharging  public  official  duties,  cannot  be  deemed  an  ap- 
propriation to  private  purposes." 

This  is  the  sole  basis  of  the  decision,  and  the  pith  and  point  of 
the  decision  itself  is  embraced  in  the  following  sentence: 

"We  do  no  more  than  decide  that  the  legislature  has  power  to  direct 
the  application  of  township  funds  to  the  payment  of  claims  growing  out  of  the 
discharge  of  official  duties  by  the  trustee  where  the  claims  are  of  a  public 
nature." 

The  premise  stated  above  is  a  mistaken  one.  It  involves  two 
mixed  questions  of  law  and  fact,  both  of  which  are  erroneous : 

First.  It  assumes  that  the  money  was  lost  by  the  trustee 
"while  engaged  in  discharging  public  official  duties." 

Second.  It  declares  that  an  appropriation  reimbursing  a  trus- 
tee for  the  loss  of  public  funds  "cannot  be  deemed  an  appropria- 
tion for  a  private  purpose." 

When  the  trustee  drew  the  money  from  the  treasury  in  bulk  and 
before  it  was  needed  to  meet  the  public  expenses  of  his  trust,  and 
deposited  it  in  a  bank,  he  was  not  engaged  in  the  discharge  of  any 
public  official  duty.  No  duty  he  owed  to  the  public  and  no  duty 
imposed  upon  him  by  law  required  him  to  withdraw  the  money 
from  the  county  treasury  in  bulk  before  there  was  a  necessity  to 
pay  it  out  for  the  public  benefit  and  deposit  it  in  a  bank.  That  act 
was  a  private  act  in  which  the  public  was  not  concerned.  It  was 
done  either  for  his  own  convenience  or  profit. 


224 

If,  having  made  this  disposition  of  the  money,  lie  loses  it 
through  the  failure  of  the  bank,  he  is  liable  for  the  loss.  His  bond 
is  also  liable.  He  or  his  bondsmen  must  make  it  good.  Knowing 
his  liability  and  the  liability  of  his  bondsmen,  he  docs  make  it  good 
by  restoring  to  the  public  fund  the  sum  lost.  This  done,  the  trans- 
action is  closed.  It  never  was  at  any  time  a  public  official  act,  but 
the  private  act  of  a  public  official,  which  was  not  required  by  law 
or  by  any  duty  he  owed  to  the  public.  But  whatever  the  act — 
private  or  official — the  transaction  is  a  closed  incident.  The  town- 
ship has  lost  nothing.  The  books  are  square.  He  has  no  claim. 
The  township  has  no  claim.  He  goes  out  of  office  with  a  clean  ac- 
count. 

It  is  in  that  condition  that  we  find  him.  While  he  is  in  that 
condition  it  is  proposed  to  do  what  ?  To  appropriate  public  money 
to  pay  an  obligation  which  the  public  owes  to  him  ?  Not  so.  The 
public  owes  him  no  obligation,  legal,  moral  or  equitable.  But  it 
is  proposed  to  appropriate  public  funds,  raised  by  a  tax  upon  the 
property  owned  by  the  people  of  the  township,  to  make  him  a  gift 
for  his  private  and  personal  benefit,  the  only  basis  of  which  is  pub- 
lic sympathy  for  a  private  misfortune.  To  say  that  such  an  ap- 
propriation of  public  funds  made  under  such  circumstances  is  for 
a  public  and  not  a  private  purpose,  is  to  distort  a  self-evident 
truth,  one  so  plain  that  there  is  room  for  neither  cavil  nor  dispute. 

The  foundation  upon  which  the  decision  is  based,  it  will  be  ob- 
served, melts  away  under  analysis  and  leaves  no  grain  of  fact  or 
truth  upon  which  it  may  rest,  and  the  decision  itself  must  there- 
fore fall. 

It  will  be  remembered  that  in  the  language  of  the  court  itself 
the  opinion  does  "no  more  than  decide  that  the  legislature  has 
power  to  direct  the  application  of  township  funds  to  the  payment 
of  claims  growing  out  of  the  discharge  of  official  duties  by  the 
trustee,  where  the  claims  are  of  a  public  nature" 

Neither  the  claim  in  the  Mount  case,  supra,  nor  the  claim  now 
under  consideration  grew  out  of  the  discharge  of  official  duties, 
nor  was  the  Mount  claim  or  is  this  of  a  public  nature. 

These  considerations  led  the  Supreme  Court  to  correct  the  above 
decision,  in  the  case  of  McClelland,  Trustee,  v.  The  State,  ex  rel. 
Speer,  138  Ind.  321,  and  to  decide  that  the  levying  of  taxes  upon 
the  property  of  a  township  to  create  a  fund  to  reimburse  a  trustee 
for  money  lost  under  such  circumstances  would  be  the  taxing  of 
the  property  of  the  citizens  of  the  township  for  a  private  and  not 
a  public  use. 


225 

In  that  case  the  court  said: 

"Here  was  an  unconstitutional  discrimination  between  citizens,  in  this, 
that  the  act  arbitrarily  requires  the  taxpayers  of  Wayne  township  to  give 
the  relator  the  sum  of  $2,812.90  and  fastens  upon  a  township  and  its  tax- 
payers a  debt  for  that  amount,  for  which  the  township  never  received  any- 
thing and  for  which  it  never  gave  its  consent  nor  contracted  a  liability. 
In  our  opinion  the  General  Assembly  is  not  vested  with  power  to  legislate 
a  tax  upon  the  people  of  a  township  for  a  private  purpose." 

It  is  urged  that  in  the  McClelland  case,  just  cited,  the  question 
involved  was  different  from  the  question  involved  in  the  Mount  case, 
supra,  in  that  the  money  lost  by  the  trustee  in  the  McClelland  case 
was  not  raised  by  taxation  upon  the  property  of  the  people  of 
the  township  whose  property  it  was  proposed  to  assess  to  create  a 
fund  with  which  to  reimburse  the  trustee.  In  part  that  is  true,  but 
not  wholly  so.  A  part  of  the  funds  lost  by  him  were  raised  by 
taxation  upon  the  people  of  the  township  whose  property  the  legis- 
lature proposed  to  retax  for  the  purpose  of  creating  a  fund  with 
which  to  reimburse  such  trustee. 

In  passing  upon  the  question  of  what  is  a  public  use,  the  court, 
in  the  McClelland  case,  aptly  said : 

"We  think  the  law  is  well  settled  that  nothing  can  fairly  be  regarded  as 
a  public  use,  unless  it  has  a  state  use  or  a  national  use  in  furtherance  of  a 
state  use.  To  defray  the  necessary  expenses  of  a  township,  or  to  make  nec- 
essary improvements  in  a  township,  is  a  state  or  public  use.  But  the  donation 
of  a  large  sum  of  money  to  the  relator  in  this  case  cannot  be  regarded  as  a 
public  use  of  money." 

It  is  true  that  in  the  above  case  the  act  provided  for  the  levy 
of  a  tax  upon  the  property  of  the  citizens  of  the  township  from 
which  to  create  a  fund  with  which  to  reimburse  the  trustee,  there 
being  no  funds  in  the  township  treasury  out  of  which  he  could  be 
reimbursed.  We  submit,  however,  that  there  is  no  distinction  in 
principle  between  that  case  and  the  case  involved  in  this  bill.  If 
the  General  Assembly  has  no  power  to  legislate  a  tax  upon  the 
people  of  a  township  for  a  private  purpose,  it  has  no  power  to 
take  the  funds  of  a  township,  which  have  been  raised  by  a  tax  lev- 
ied upon  the  property  of  the  people  of  such  township,  and  appro- 
priate them  to  a  private  purpose.  If  the  General  Assembly  is  in- 
hibited from  laying  a  tax  for  a  private  purpose,  it  must  neces- 
sarily be  inhibited,  on  like  principle  and  for  like  reasons,  from 
appropriating  for  a  private  purpose  the  money  which  has  been 
raised  by  taxation. 

The  levying  of  a  tax,  or  the  appropriation  of  money  raised 
[15—19891] 


226 

by  taxation,  for  the  reimbursing  of  the  trustee  named  in  this  bill, 
would  be,  in  effect,  taking  the  property  of  one  man  to  bestow  it 
upon  another.  In  effect,  it  would  be  a  taking  of  the  property  of 
the  citizens  of  the  township  affected  for  a  private  and  not  a  public 
use.  It  would  be,  in  plain  English,  a  robbery  and  a  spoliation  of 
the  citizens  of  the  township  for  the  benefit  of  the  individual  named 
as  the  beneficiary  in  the  bill — a  robbery  and  a  spoliation  for  which 
no  warrant  can  be  found  in  the  Constitution  of  the  State,  in  law, 
in  equity,  or  in  the  conscience  of  honest  men. 

The  bill  under  consideration  provides  specifically  for  the  levy- 
ing of  a  tax  for  the  creation  of  a  fund  to  recoup  the  township  for 
the  money  appropriated  by  it  for  the  reimbursement  of  the  trustee. 

That  it  is  an  attempt  to  make  an  appropriation  of  public  funds 
for  a  private  purpose,  and,  in  effect,  to  take  private  property  for 
private  use,  through  the  appropriation  of  public  funds  which  have 
been  raised  by  taxation,  and  that  such  an  attempt  is  unconstitu- 
tional, is  well  established  by  judicial  decision.  In  fact,  there  is 
almost  an  unbroken  line  of  authority  to  that  effect: 

McClelland,  etc.,  v.  The  State,  138  Ind.  321 ; 
State,  etc.,  v.  Tappen,  29  Wis.  664 ; 
People  v.  Supervisor,  etc.,  16  Mich.  253; 
Bristol  v.  Johnson,  34  Mich.  123; 
Hoagland  v.  City  of  Sacramento,  52  Cal.  142; 
Lowell  v.  City  of  Boston,  111  Mass.  454; 
Thorndyke  v.  Inhabitants  of  Camden,  82  Me.  39; 
Cooley  on  Constitutional  Limitations,  pp.  332-341. 

On  the  other  side,  the  case  in  90  Ind.,  supra,  stands  practically 
alone.  The  premise  upon  which  the  decision  rests,  as  we  have 
shown,  is  a  mistaken  one.  It  consists  of  a  bare  statement  without 
a  word  of  reasoning  or  the  citation  of  a  single  authority  to  sup- 
port it. 

In  the  discussion  of  the  power  of  the  legislature  to  make  such 
an  appropriation  as  was  there  sought  to  be  made,  the  case  of 
Brooks  v.  Landsborough,  36  O.  St.  227,  is  cited,  but  the  citation 
is  somewhat  unfortunate,  in  that  the  Ohio  court,  in  its  decision,  was 
construing  a  law  entirely  different  in  principle  from  the  one  before 
the  Indiana  court.  In  the  Ohio  case  the  treasurer  of  a  school  dis- 
trict was  robbed.  He  was  unable  to  replace  the  money.  The  legis- 
lature passed  an  act  relieving  his  bondsmen  and  authorizing  the 
district  officers  to  levy  a  tax  upon  the  property  of  the  district  to 
reimburse  him,  after  first  submitting  the  matter  to  the  vote  of  the 
electors  of  the  district  and  receiving  their  approval.  It  will  be 


99 


observed  that  the  bondsmen  were  not  relieved  and  that  the  tax  was 
not  levied  by  the  act  of  the  Ohio  legislature.  It  only  provided  a 
way  by  which  the  people  of  the  school  district  might  relieve  the 
bondsmen  and  levy  a  tax. 

That  case,  we  submit,  is  slight  authority  for  an  act  which 
levies  a  tax,  or  takes  funds  raised  from  a  tax  levy,  for  the  reim- 
bursement of  public  officials  for  money  lost  by  them,  and  does  so 
without  the  consent  of  the  citizens  taxed. 

There  is  yet  another  reason,  as  before  indicated,  why  the  bill 
returned  herewith  is  unconstitutional,  and  which  takes  it  clearly 
outside  of  the  rule  laid  down  by  the  court  in  the  case  of  Mount  v. 
State,  supra.  It  provides 

"that  the  said  Henry  J.  Hostettler  and  the  sureties  on  his  bond  as  trustees 
shall  be  released  and  discharged  from  any  and  all  liability  for  the  payment 
of  the  money  of  said  township  so  lost." 

This   provision  is   clearly   within  the  constitutional   inhibition 
contained  in  Section  24*  of  the  Bill  of  Rights  which  provides  that 
"No     *     *     *     law  impairing  the  obligation  of  contracts  shall  be  passed." 

It  is  also  in  direct  conflict  with  the  decisions  of  the  Supreme 
Court  of  the  State. 

The  case  of  Johnson  v.  The  Board  of  Commissioners  of  Ran- 
dolph County,  reported  in  the  140  Ind.  152,  is  directly  in  point. 
The  decision  there  rendered  has  never  been  criticised,  modified  or 
overruled,  so  far  as  I  have  been  able  to  ascertain.  The  above  case 
involved  the  validity  of  a  statute  which  sought  to  relieve  a  county 
treasurer  and  his  bondsmen  from  liability  on  account  of  the  official 
bond  of  the  treasurer  for  money  belonging  to  his  county  and  lost 
by  him.  }  |  ^j 

The  language  of  the  statute  seeking  to  relieve  the  official  and 
his  bondsmen  from  liability  on  his  official  bond,  is  substantially  the 
same  as  the  language  used  in  the  present  bill. 

In  speaking  to  the  question  of  the  constitutionality  of  the 
statute,  the  court  said : 

"The  act  could  not  have  been  any  more  violative  of  the  Constitution,  both 
state  and  federal,  if  it  had  provided  that  the  obligation  of  the  bond  be,  and 
the  same  is,  hereby  abrogated  and  annulled.  Because,  if  the  Legislature  can 
release  a  party  from  a  part  of  the  obligation  of  his  contract,  it  can  release 
him  from  all  of  it.  Both  Constitutions  forbid  the  Legislature  to  pass  a  law 
impairing  the  obligation  of  contracts  *  *  *. 

"We,  therefore,  hold  that  the  act  referred  to  was  and  is  void  because 
it  violates  the  constitutional  provisions  above  referred  to." 


228 

Because  of  the  considerations  named  above,  I  have  been  unable 
to  give  my  approval  to  this  measure,  and  I  venture  to  express  the 
hope  that  there  is  not  a  member  of  the  General  Assembly  who  will 
be  willing  to  sustain  the  bill  and  the  kindred  measures  still  pending, 
before  the  General  Assembly,  upon  a  careful  consideration  of  the 
authorities  cited,  in  view  of  the  public  policy  involved,  and  his 
oath  to  support  the  Constitution  of  the  State. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

SENATE  BILL  No.  174. 


FEBRUARY  27,  1905. 

Mr.  President  and  Gentlemen  of  the  Senate: 

I  return  herewith  without  my  approval,  Senate  Bill  No.  174, 
for  the  relief  of  William  Watters,  Treasurer  of  Lagrange  County. 

The  bill  provides  that 

"said  Watters  and  his  sureties  are  hereby  released  and  discharged  from  any 
and  all  liability  for  the  loss  of  said  money." 

This  language  refers  to  the  loss  of  certain  public  moneys  com- 
ing into  the  hands  of  said  Watters  as  treasurer  of  said  county, 
and  by  him  deposited  in  a  certain  bank,  and  lost  through  the  fail- 
ure of  such  bank. 

The  bill  also  provides  for  the  levying  of  a  tax  for  the  creation 
of  a  fund  from  which  to  recoup  said  county  for  the  money  appro- 
priated for  the  purpose  of  reimbursing  said  treasurer. 

I  withhold  my  approval  from  the  bill  for  the  following  reasons : 

First.     It  is  against  public  policy. 

Second.     It  is  unconstitutional. 

My  reasons  for  my  action  are  fully  set  forth  in  the  message 
accompanying  Senate  Bill  No.  160,  this  day  returned  to  the  Sen- 
ate without  my  approval. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


229 
SENATE  BILL  No.  38. 


FEBRUARY  28,  1905. 

Mr.  President  and  Gentlemen  of  the  Senate: 

I  return  herewith  Senate  Bill  No.  38  without  my  approval. 
The  bill  provides  for  certain  changes  and  innovations  in  matters 
of  pleading  and  practice  in  civil,  probate,  special  statutory  and 
criminal  proceedings,  and  purports  to  "provide  for  the  removal  of 
technical  defects  and  for  the  decision  of  causes  upon  the  substan- 
tial issues  between  the  parties,"  but  its  effect,  if  it  became  a  law, 
would  be  to  increase  appeals  and  multiply  reversals  rather  than  to 
minimize  them. 

I  agree  with  the  friends  of  the  measure  that  pleading  and 
practice  is  too  technical  in  the  courts  of  Indiana,  and  that  there  are 
too  many  reversals  of  causes  upon  grounds  other  than  the  merits  of 
such  causes.  The  sole  object  of  judicial  machinery  should  be  to 
secure  exact  justice  between  men.  In  so  far  as  existing  judicial 
machinery  falls  short  of  that  purpose,  it  is  defective  and  ought  to 
be  amended. 

The  frequent  reversal  of  causes  for  slight  errors  in  the  admis- 
sion of  testimony  or  trifling  slips  made  by  the  trial  judge  in  the 
progress  of  the  trial,  impairs  the  confidence  of  the  public  in  the 
certainty  of  justice,  and  is  to  be  greatly  regretted.  There  are 
some  provisions  in  the  bill  under  consideration  that,  if  enacted, 
would  tend  to  minimize  such  errors.  These  appeal  to  me,  and  I 
would  give  my  approval  to  them  if  I  could.  But  there  are  provi- 
sions in  the  bill  which  I  am  confident  would  multiply  such  errors, 
and  which  preclude  me  from  assenting  to  its  passage. 

Sections  1  to  5,  inclusive,  require  that  all  demurrers,  motions 
to  quash,  or  motions  of  any  kind,  addressed  to  any  pleading,  con- 
taining two  or  more  paragraphs  or  counts,  or  to  two  or  more  sub- 
j  ects  or  questions ;  and  that  two  or  more  j  oint  obj  ections  to  any 
motion  or  proceeding,  or  to  two  or  more  items  of  evidence,  shall 
be  held  to  be  separate  and  several,  and  shall  be  sufficient  to  chal- 
lenge, separately  and  severally,  the  sufficiency  of  each  paragraph 
or  count  of  any  such  pleading,  or  of  each  of  such  subjects  or 
questions,  or  the  correctness  of  the  ruling  of  the  court  upon  each 
of  such  items  of  evidence  or  upon  such  motions. 

Said  sections  also  provide  that  any  exception  taken  to  any  rul- 
ing of  the  court  shall  be  held  to  be  separate  and  several  objections 
to  each  question  ruled  upon,  though  it  be  a  joint  exception  in  fact. 


230 

They  further  provide  that  exceptions  taken  to  the  giving,  re- 
fusing or  modifying  instructions,  though  such  exceptions  be  gen- 
eral in  character,  shall  be  held  to  be  separate  and  several,  and  that 
general  assignments  of  error  in  motions  for  a  new  trial  shall  be  held 
to  be  separate  and  several. 

They  also  further  provide  that  any  demurrer,  motion,  objec- 
tion, exception  or  assignment  of  error,  in  which  two  or  more  par- 
ties shall  join,  shall  be  held  to  be  separate  and  several. 

In  short,  it  applies  to  the  whole  procedure  of  issue  and  trial, 
the  vice  embodied  in  the  general  demurrer  for  want  of  facts  now 
allowed  by  the  law. 

I  know  of  no  one  rule  of  practice  which  makes  it  possible  to 
plant  so  many  errors  in  causes  pending  in  the  nisi  prius  courts  of 
the  State  as  does  the  right  of  general  demurrer. 

Lawyers  find  what  they  conceive  to  be  a  fatal  defect  in  a  plead- 
ing filed  by  opposing  counsel.  They  file  thereto  a  general  demur- 
rer for  want  of  sufficient  facts.  Argument  is  made  upon  the  de- 
murrer, but  the  real  defect  is  adroitly  and  purposely  concealed 
and  not  presented  to  the  court,  lest  the  court  discover  and  permit 
amendment  and  thereby  remove  the  chance  to  implant  error 
in  the  record  of  a  cause  of  doubtful  merit.  Not  being  presented, 
the  court  overlooks  it,  and  overrules  the  demurrer.  Counsel  prompt- 
ly except  to  the  ruling.  The  trial  proceeds.  The  cause  is  lost  on 
its  merits.  Then  the  knowledge  of  the  existence  of  a  fatal  error 
in  the  record  impels  both  counsel  and  client  to  take  an  appeal.  The 
appeal  is  taken.  Once  in  the  Supreme  Court,  the  battery  so  care- 
fully masked  in  the  trial  court  is  revealed,  the  error  pointed  out, 
and  the  cause  reversed. 

The  provisions  contained  in  the  first  five  sections  of  the  bill  will 
make  possible  a  like  practice  in  all  the  proceedings  of  causes  in 
the  trial  court,  involving  the  issues,  the  trial  and  the  motion  for  a 
new  trial.  If  enacted,  they  will  inevitably  increase  appeals  and 
multiply  reversals,  and  prove  a  grievous  disappointment  to  those 
who  enacted  them  with  the  belief  that  they  would  minimize  appeals 
and  reversals. 

If  there  is  real  desire  to  minimize  appeals  and  reversals,  an  act 
precluding  the  reversal  of  a  case  on  account  of  any  ruling  of  the 
trial  court  on  a  demurrer  for  want  of  sufficient  facts,  except  for 
such  causes  as  are  specified  and  set  out  in  such  demurrer,  ought  to 
challenge  the  favorable  consideration  of  the  General  Assembly,  and, 
if  enacted,  it  would  do  much  toward  accomplishing  the  object  de- 
sired. 


231 

Section  10  of  the  bill  is  also  objectionable.  It  provides  that 
any  rule  made  by  any  court  shall  not  be  binding  upon  the  court 
when  its  enforcement  will  work  a  hardship  or  injustice. 

Rules  of  court,  when  adopted  and  declared,  now  have  the  force 
and  effect  of  statutes,  and  are  binding  upon  the  court  who  makes 
them,  upon  all  counsel  and  upon  all  litigants  who  come  before  such 
court.  They  rest  upon  and  bind  all  alike,  and  so  they  ought  to  do. 

If  a  cause  has  progressed  until  a  rule  of  court  attaches  thereto, 
the  court  ought  not  to  have  the  power  to  waive  the  rule  and  take 
such  cause  out  of  the  operation  of  such  rule  upon  discretion. 

Section  11  provides  that  where  one  division  of  the  Appellate 
Court  has  rendered  a  decision,  one  or  more  judges  of  the  other  divi- 
sion of  such  court  may  at  any  time,  before  the  opinion  has  been 
certified  to  the  trial  court,  bring  such  cause  before  the  full  court 
for  further  examination,  opinion  or  decision. 

The  effect  of  this  provision  would  be  to  cause  counsel,  who  lose 
a  case  in  one  division  of  the  Appellate  Court,  to  importune  members 
of  the  other  division  of  such  court  until  some  one  of  such  members 
exercise  the  power  vested  in  him  by  the  statute  and  brings  the  case 
before  the  whole  court.  In  this  way  the  business  of  the  court 
would  be  disarranged  and  obstructed  and  the  court  compelled  to  sit 
en  bane  upon  every  case. 

I  am  fully  convinced  that  there  ought  not  to  be  two  divisions 
of  the  Appellate  Court,  and  that  the  court  should  be  required  in 
every  case  to  sit  as  a  single  body,  but  the  statute  ought  to  make 
direct  provision  for  such  change  and  not  seek  to  do  it  by  the  indi- 
rect provisions  found  in  said  section. 

I  am  conscious  that  lawyers  differ  greatly  upon  questions  of 
practice  and  judicial  procedure,  and  that  what  may  be  accepted  by 
one  as  the  consummate  flower  of  human  wisdom  may  appear  to  an- 
other as  dangerous  or  as  little  better  than  a  useless  and  ineffective 
provision.  For  this  reason  I  would  hesitate  to  withhold  my  ap- 
proval from  the  present  measure  were  it  not  for  the  presence  in  the 
bill  of  a  section  that  is  clearly  within  the  inhibition  of  the  Con- 
stitution. 

Section  12  of  the  measure  provides  that  when  a  petition  for  a 
rehearing  is  filed  in  either  the  Appellate  or  the  Supreme  Court,  the 
chief  justice  or  presiding  judge  shall  distribute  the  case  to  some 
judge  other  than  the  writer  of  the  original  opinion,  who  shall  re- 
examine  such  record,  and  report  thereon.  This  section  presents  a 
graver  question  than  any  heretofore  mentioned.  It  is  a  direct  in- 
vasion by  the  Legislature  of  the  rights  and  powers  of  another  in- 


232 

dependent  and  co-ordinate  department  of  the  State  government. 
By  express  constitutional  provision  the  government  of  this  State 
is  divided  into  three  separate  departments,  independent  and  co- 
ordinate— legislative,  executive  and  judicial.  The  judiciary  con- 
stitutes an  independent  department  of  government — possessing  not 
only  equal  powers,  but  exclusive  powers  with  respect  to  the  duties 
assigned  to  it.  The  Supreme  Court  is  a  constitutional  tribunal. 
Its  power  to  prescribe  rules  regulating  the  conduct  of  its  business 
exists,  not  by  virtue  of  legislation,  but  by  virtue  of  the  inherent 
right  of  that  tribunal  to  maintain  its  dignity  and  independence 
and  to  decide  for  itself  the  manner  and  mode  in  which  it  shall  dis- 
charge its  official  duties.  Into  that  domain  the  Legislature  has  no 
right  to  go. 

In  the  case  of  Smythe  v.  Boswell,  117  Ind.  366,  this  language 
is  used  in  the  discussion  of  the  question  now  under  consideration : 

"*  *  *  the  judiciary  is  an  independent  department  of  government, 
exclusively  invested  by  the  Constitution  with  one  element  of  sovereignty,  and 
this  court  receives  its  essential  and  inherent  powers,  rights  and  jurisdiction 
from  the  Constitution  and  not  from  the  legislature." 

An  act  of  the  General  Assembly  of  1889  provided  that 

"It  shall  be  the  duty  of  the  Supreme  Court  to  make  a  syllabus  of  each 
opinion  recorded  by  said  court  *  *  *." 

This  act  was  held  unconstitutional  on  the  ground  that  it  sought 
to  add  duties  to  those  devolved  upon  the  judges  of  the  Supreme 
Court  by  the  Constitution.  In  passing  upon  the  question  the  court 
said  : 

"We  have  no  doubt  that  it  is  our  right  and  our  duty  to  give  judgment 
upon  the  questions  we  have  stated,  because  they  directly  concern  the  rights, 
powers  and  functions  of  the  court,  and  no  other  tribunal  can  determine  for 
us  what  our  rights,  duties  and  functions  are  under,  the  Constitution." 
Ex  Parte  Griifths,  118  Ind.  86. 

In  a  very  early  case  in  this  State  it  was  decided : 

"The  powers  of  the  three  departments  are  not  merely  equal, — they  are 
exclusive,  in  respect  to  the  duties  assigned  to  each.  They  are  absolutely  inde- 
pendent of  each  other." 

Wright  v.  Sefrees,  8  Ind.  298. 

Speaking  upon  this  question  Judge  Elliott,  in  his  "Appellate 
Procedure,"  aptly  says: 

"It  is  true,  no  doubt,  that  the  Legislature  may  regulate  the  procedure, 
but  it  cannot  in  any  manner  destroy  or  impair  the  substantive  power,  for  that 
is  above  legislative  reach.  The  fundamental  principle  to  which  we  have  re- 


233 

ferred  requires  that  it  shouid  be  held  that  the  conduct  of  business,  the  course 
of  argument  and  the  like,  are  matters  for  the  determination  of  the  courts 
and  not  for  legislative  decision.  The  Legislature  may,  of  course,  prescribe 
rules  of  pleading  and  practice  and  require  the  courts  to  conform  to  those 
rules,  but  it  cannot  so  far  control  the  conduct  of  business  as  to  invade  the 
domain  of  the  judiciary.  It  is  very  questionable  whether  the  Legislature  can 
direct  how  briefs  shall  be  prepared  or  arguments  conducted,  since  the  attempt 
to  exercise  such  power  would  seem  to  be  an  unauthorized  encroachment  upon 
the  province  of  the  courts. 

"It  is  an  ancient  principle  that  courts  may  prescribe  rules  for  the  conduct 
of  business  and  this  power  is  an  inherent  one,  so  far,  at  least,  as  concerns 
the  mode  of  conducting  the  affairs  of  the  court.  *  *  *  It  is  not,  and  cannot  be, 
within  the  legislative  power  to  so  fetter  or  control  the  action  of  the  courts  in 
the  conduct  of  business  as  to  preclude  the  exercise  of  judicial  discretion 
or  judgment.  *  In  so  far  as  regards  the  personal  conduct  of  judges 

of  constitutional  courts  in  the  exercise  of  the  duties  of  the  judicial  office  it  is 
the  law  that  legislative  power  is  ineffective  to  control  them,  for  it  is  evident 
that  without  freedom  of  judicial  action  government  must  degenerate  into 
a  system  of  sovereign  and  supreme  legislative  power,  and  this  cannot  be 
allowed  to  take  place  under  a  republican  form  of  government." 
Elliot's  Appellate  Procedure,  Sections  6  and  7. 

In  a  very  recent  opinion  of  the  Supreme  Court,  handed  down 
as  late  as  the  first  day  of  the  present  month,  and  not  yet  pub- 
lished, the  court  has  spoken  quite  vigorously  upon  this  question. 
The  language  hereinafter  quoted  is  used  in  construing  an  act  of 
the  General  Assembly,  approved  March  9,  1903,  concerning  civil 
procedure  and  requiring  the  Supreme  Court  to  weigh  the  evidence 
and  decide  questions  of  fact  in  certain  cases,  and  is  as  follows : 

"The  court's  power  to  prescribe  rules  regulating  the  conduct  of  its  busi- 
ness is  inherent  in  the  tribunal.  It  does  not  depend  on  any  authority  granted 
by  the  Legislature.  While  the  latter  may  prescribe  rules  of  procedure  and 
pleading  by  which  both  courts  and  the  parties  in  the  case  are  bound,  never- 
theless, it  cannot,  under  the  Constitution,  encroach  on  judicial  domain  by 
prescribing  the  manner  and  mode  in  which  the  courts  shall  discharge  their 
official  duties.  The  Legislature  has  no  more  right  to  break  down  the  rules 
prescribed  by  this  court  for  conducting  its  official  business,  than  the  court 
has  to  prescribe  the  mode  and  manner  in  which  the  Legislature  shall  perform 
its  legislative  duties." 

Parkinson  v.  Thompson,  No.  20,401. 

A  California  statute  provided: 

"All  decisions  given  upon  an  appeal  to  any  Appellate  Court  of  this 
State,  shall  be  given  in  writing,  with  the  reason  thereof,  and  filed  with  the 
clerk  of  the  court." 

Acting  under  this  statute  the  Supreme  Court  of  that  State  de- 
cided a  case  without  giving  an  opinion  in  writing  setting  forth  its 


234 

reason  for  the  decision.  A  motion  was  made  to  require  the  court  to 
file  an  opinion  giving  its  reason.  In  passing  upon  the  motion  the 
court  said : 

"The  provisions  of  the  statute  had  not  been  overlooked  when  the  decision 
was  rendered.  It  is  but  one  of  many  provisions  embodied  in  different  statutes 
by  which  control  over  the  Judiciary  Department  of  the  government  has  been 
attempted  by  legislation.  To  accede  to  it  any  obligatory  force,  would  be  to 
sanction  a  most  palpable  encroachment  upon  the  independence  of  this  depart- 
ment. If  the  power  of  the  Legislature  to  prescribe  the  mode  and  manner 
in  which  the  Judiciary  shall  discharge  their  official  duties  be  once  recognized, 
there  will  be  no  limit  to  the  dependence  of  the  latter.  If  the  Legislature  can 
require  the  reasons  of  our  decisions  to  be  stated  in  writing,  it  can  forbid 
their  statements  in  writing,  and  enforce  their  oral  announcement  or  prescribe 
the  paper  upon  which  they  shall  be  written,  and  the  ink  which  shall  be  used. 
And  yet  no  sane  man  will  justify  any  such  absurd  pretension,  but  where  is  the 
limit  to  this  power  if  its  exercise  in  any  particular  be  admitted? 

"The  truth  is,  no  such  power  can  exist  in  the  legislative  department,  or 
be  sanctioned  by  any  court  which  has  the  least  respect  for  its  own  dignity 
and  independence.  In  its  own  sphere  of  duties,  this  court  cannot  be  trammeled 
by  any  legislative  restrictions.  Its  constitutional  duty  is  discharged  by  the 
rendition  of  decisions.  The  Legislature  can  no  more  require  this  court  to 
state  the  reasons  for  its  decisions,  than  this  court  can  require,  for  the  validity 
of  the  statutes,  that  the  Legislature  shall  accompany  them  with  the  reasons 
for  their  enactment." 

Houston  v.  Williams,  13  Cal.  25. 

The  Legislature  of  this  State  has  no  power  to  require  a  re- 
examination  or  a  rehearing  of  a  case  already  considered  and  ad- 
judicated by  the  Supreme  Court. 

Address  of  Mr.  Justice  Brown  on  Judicial  Independence, 
Second  Volume,  American  Bar  Association,  1889. 

Nor  has  the  Legislature  power  to  require  the  Supreme  Court 
of  this  State  to  give  an  opinion  in  writing.  The  fact  that  an 
opinion  in  writing  is  prepared  and  handed  down  in  every  case  de- 
cided by  the  Supreme  Court,  is  due  not  to  legislative  enactment, 
but  to  a  constitutional  provision. 

Section  7,  Article  5,  State  Constitution. 

It  has  been  urged  by  the  friends  of  this  measure  that  the  Su- 
preme Court  can  take  care  of  itself  and  needs  no  assistance  from  me. 
I  think  the  statement  is  quite  true.  But  the  Supreme  Court,  nor 
any  other  tribunal  or  department  of  government,  can  perform  for 
me  the  constitutional  functions  devolved  upon  me.  These  I  my- 
self must  assume.  One  of  the  duties  devolved  upon  this  office  is 
that  whoever  occupies  it  shall  participate  in  legislation  to  the  extent 


235 

of  approving  or  disapproving  all  measures  passed  by  the  General 
Assembly.  This  duty,  considered  in  the  light  of  his  official  oath, 
requires  whoever  is  Governor  to  decide  for  himself  the  constitu- 
tionality of  every  legislative  measure  coming  before  him.  If,  upon 
consideration,  the  imconstitutionality  of  a  measure  is  clear  to  him, 
it  is  his  duty  to  interpose  objection  to  its  passage  and  to  give  the 
reasons  of  his  objection. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

SENATE  BILL  No.  130. 

MARCH  5,  1905. 
Mr.  President  and  Gentlemen  of  the  Senate: 

I  return  herewith  Senate  Bill  No.  130  without  my  approval. 
The  bill  provides  for  the  elevation  of  steam  railroad  grade  cross- 
ings and  other  matters  relative  thereto,  in  the  city  of  Indianapolis, 
and  is  indentical  with  House  Bill  No.  145,  which  I  have  already 
signed,  and  deposited  with  the  Secretary  of  State,  as  heretofore 
reported  to  the  House  of  Representatives. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

SENATE  BILL  No.  278. 

MARCH  6,  1905. 
Mr.  President  and  Gentlemen  of  the  Senate: 

I  return  herewith  Senate  Bill  No.  278  without  my  approval. 

The  bill  relates  to  the  improvement  of  streets,  alleys,  sidewalks 
«'ind  other  public  places  in  incorporated  towns  and  in  incorporated 
cities  having  a  population  at  the  last  United  States  census  of  less 
than  35,599. 

I  approve  of  its  provisions,  but,  upon  examination,  I  find  that 
similar  provisions  arc  incorporated  in  Senate  Bill  No.  75,  con- 
cerning municipal  corporations,  which  has  received  executive  ap- 
proval, and  which  will  become  the  law  upon  the  publication  and 
distribution  of  the  session  acts. 

Two  acts  containing  two  systems  of  procedure  relative  to  the 
same  kind  of  improvements  in  cities  and  towns,  and  substantially 


236 

alike  in  all  their  provisions,  ought  not  to  encumber  the  statutes.     I 
therefore  withhold  my  approval  from  said  bill. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

SENATE  BILL  No.  224. 

MARCH  8,  1905. 
Mr.  President  and  Gentlemen  of  the  Senate: 

I  deposit  herewith  Senate  Bill  No.  224,  with  the  Secretary  of 
State  without  my  approval,  pursuant  to  the  provisions  of  the  Con- 
stitution of  the  State,  and  submit  herewith  my  reasons  for  so  doing. 
The  bill  seeks  to  amend  Section  2  of  an  act  concerning  the  loca- 
tion and  construction  of  free  gravel,  stone  and  macadamized 
roads,  approved  March  11,  1901.  The  subject-matter  thereof  is 
fully  covered  by  the  provisions  of  Senate  Bill  No.  77,  entitled  "An 
act  concerning  highways,"  which  has  this  day  received  executive 
approval.  The  provisions  of  the  bill  deposited  herewith  are  sub- 
stantially the  same  as  the  provisions  of  said  Senate  bill. 

The  session  acts  ought  not  to  be  encumbered  by  two  separate 
acts  covering  the  same  subject  matter  and  containing  substantially 
the  same  provisions.  I  therefore  withhold  executive  approval  from 
said  Senate  Bill  No.  224. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

SENATE  BILL  No.  275. 

MARCH  8,  1905. 
Mr.  President  and  Gentlemen  of  the  Senate: 

I  deposit  herewith  Senate  Bill  No.  275  with  the  Secretary  of 
State  without  my  approval,  pursuant  to  the  provisions  of  the  Con- 
stitution of  the  State,  and  submit  herewith  my  reasons  for  so  doing. 

The  bill  is  supplemental  to  an  act  concerning  the  location  and 
construction  of  free  gravel,  stone  and  macadamized  roads,  approved 
March  11,  1901.  The  subject-matter  of  such  bill  is  covered  by 
the  provisions  of  Senate  Bill  No.  77,  the  same  being  "An  act  con- 
cerning highways,"  which  has  this  day  received  executive  ap- 
proval. The  provisions  of  both  bills  are  substantially  the  same. 


237 

The  session  acts  ought  not  to  be  encumbered  by  two  acts  con- 
taining substantially  the  same  provisions  upon  the  same  subject. 
I  therefore  withhold  executive  approval  from  said  Senate  Bill  No. 
275. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

SENATE  BILL  No.  310. 

MARCH  8,  1905. 
Mr.  President  and  Gentlemen  of  the  Senate: 

I  deposit  herewith  Senate  Bill  No.  310  with  the  Secretary  of 
State  without  my  approval,  pursuant  to  the  provisions  of  the  Con- 
stitution of  the  State,  and  submit  herewith  my  reasons  for  so 
doing. 

The  bill  seeks  to  amend  Section  256  of  "An  act  concerning  pro- 
ceedings in  civil  cases,"  approved  April  7,  1881,  in  force  September 
19,  1881,  and  being  Section  413  of  the  Revised  Statutes  of  1881 
and  Section  417  of  Burns'  Revised  Statutes  of  1901. 

The  title  of  the  act  sought  to  be  amended  is  improperly  set 
out  in  the  title  of  the  bill.  The  bill  reads,  "An  act  to  amend  Sec- 
tion 256  of  an  act  entitled  an  'act  concerning  civil  procedure.'  ' 

As  above  suggested,  the  title  of  the  act  sought  to  be  amended 
is  an  "Act  concerning  proceedings  in  civil  cases." 

The  error  in  the  title  renders  the  bill  invalid. 

Section  21,  Article  4,  of  the  Constitution  provides: 

"No  act  shall  ever  be  revised  or  amended  by  mere  reference  to  its  title; 
but  the  act  revised  or  section  amended  shall  be  set  forth  and  published  at  full 
length." 

R.  S.  1901,  Section  117. 

It  has  been  decided  that  where  the  title  to  an  amendatory  stat- 
ute refers  to  but  does  not  recite  the  title  of  the  act  sought  to  be 
amended,  the  designation  in  such  title  is  insufficient,  although  the 
section  attempted  to  be  amended  is  referred  to  as  being  a  desig- 
nated section  of  the  Revised  Statutes  of  1881. 

Boreing  v.  State,  141  Ind.  640; 
Feibleman  v.  State,  93  Ind.  516; 
Linquest  v.  State,  153  Ind.  543. 

In  the  last  cited  case  the  court  announces  the  rule  as  follows : 


238 

"It  is  settled  by  the  decisions  of  this  court  that,  in  the  revision  of  an 
act  or  the  amendment  of  a  section,  two  things  are  required:  (1)  The  title 
of  the  act  to  be  amended  must  be  referred  to  by  setting  it  out;  (2)  The 
act  as  revised,  or  section  as  amended,  must  be  set  forth,  and  published  at  full 
length  *  *  *. 

"When  the  act  is  identified  in  the  manner  required  by  the  Constitution, 
and  it  is  not  certain  what  act  was  intended  to  be  amended,  the  court  will 
resort  to  means  other  than  the  title  to  determine  what  act  was  intended. 
But  if  the  act  is  not  identified  in  the  manner  required  by  the  Constitution, 
the  court  cannot  resort  to  other  means  of  identification,  although  a  resort 
to  such  other  means  would  point  out  the  act  intended  beyond  any  question." 

The  exact  question  presented  by  the  defect  in  the  title  to  the 
bill  filed  herewith  was  presented  to  the  Supreme  Court  in  the  case 
of  Mankin  v.  Pennsylvania  Company,  160  Ind.  453.  In  this  case 
the  court  was  asked  to  construe  an  act  of  the  General  Assembly  of 
1891,  which  purported  to  amend  Section  350  of  the  act  of  1881 
concerning  struck  juries.  The  amendatory  act  submitted  to  the 
court  for  construction  referred  to  the  title  of  the  act  to  be  amended 
as  "An  act  concerning  trial  by  jury,"  giving  the  number  of  the 
section  of  the  act  sought  to  be  amended,  and  the  section  number 
thereof  in  the  Revised  Statutes  of  1881.  The  act  sought  to  be 
amended  was  the  same  act  sought  to  be  amended  by  the  bill  filed 
herewith.  As  we  have  seen,  the  title  of  said  act  of  1881  is  "An 
act  concerning  proceedings  in  civil  cases." 

The  court  held  the  act  of  1891  to  be  unconstitutional  and  void, 
under  the  provision  of  the  Constitution  hereinbefore  cited.  I  quote 
from  the  opinion : 

"It  has  been  uniformly  held  by  this  court  that  two  things  were  required 
by  said  section  of  the  Constitution  in  the  amendment  of  a  section  of  an  act: 
(1)  The  title  of  the  act  amended  should  be  referred  to  by  setting  the  same 
out  in  the  title  to  the  amendatory  act;  and  (2)  the  section  as  amended 
should  be  set  forth  and  published  at  full  length.  '*  *  *.  The  title  to  the  act 
of  1891,  in  controversy,  reads  as  follows:  'An  act  to  amend  Section  359  of 
an  act  concerning  trial  by  jury,  in  force  since  September  19,  1881,  the  same 
being  Section  525  of  the  Revised  Statutes  of  1881.'  The  reference  in  the  title 
to  Section  359,  under  the  cases  cited  above,  is  not  sufficient.  Said  section 
may  be  found  in  an  act  entitled  'An  act  concerning  proceedings  in  civil  cases,' 
*.  It  will  be  observed  that  the  amendatory  act  of  1891  does  not  refer 
to  the  title  of  the  act  to  be  amended  by  setting  it  out,  as  required  by  said 
Section  21  of  Article  4  of  the  Constitution,  but  refers  to  the  act  to  be 
amended  as  'An  act  concerning  trial  by  jury,'  which  is  not  the  title  of  the 
act  in  which  said  Section  359,  supra,  may  be  found.  When  the  net  or  section 
to  be  amended  is  identified  in  the  manner  required  by  the  Constitution,  and 
it  is  not  certain  what  act  or  section  was  amended,  the  court  will  resort  to 
means  other  than  the  title  to  determine  what  act  or  section  was  amended. 
But  if  the  act  or  section  is  not  identified  in  the  manner  required  by  the 


239 

Constitution,  the  court  will  not  resort  to  such  other  means  of  identification, 
although  the  act  intended  would  thereby  be  ascertained  beyond  question. 
*  *  *.  It  follows  that  as  the  title  of  said  act  of  1891,  supra,  fails  to 
identify  the  section  to  be  amended  by  setting  the  same  out  in  the  title  thereof, 
as  required  by  Section  21  of  Article  4  of  the  Constitution,  the  same  is  uncon- 
stitutional and  void,  *'  *  *." 

From  the  above  authorities  it  becomes  clear  that  the  title  to  the 
bill  filed  herewith  is  insufficient,  and  that  the  act  would  be  invalid  if 
the  bill  were  signed.     I  therefore  refuse  to  approve  the  same. 
Respectfully  submitted, 

J.  FRANK  HANL.Y, 

Governor. 

SENATE  BILL  No.  235. 

MARCH  9,  1905. 
Mr.  President  and  Gentlemen  of  the  Senate: 

I  deposit  herewith  Senate  Bill  No.  235  with  the  Secretary  of 
State  without  my  approval,  pursuant  to  the  provisions  of  the  Con- 
stitution of  the  State,  and  submit  herewith  my  reasons  for  so  doing. 

The  bill  is  entitled  "An  act  concerning  the  city  court  and  the 
judge  thereof  in  cities  of  more  than  36,500  and  less  than  43,000 
inhabitants,  as  shown  by  the  last  preceding  United  States  census, 
and  declaring  an  emergency."  It  is,  however,  in  fact  an  act  regu- 
lating the  practice  in  certain  courts  of  justice  in  the  class  of  cities 
named  and  for  the  punishment  of  crimes  and  misdemeanors.  It  is 
local  and  special  in  character,  and  is  within  two  of  the  inhibitions 
contained  in  Section  22,  Article  4,  of  the  State  Constitution. 

In  effect,  it  divides  the  cities  of  the  State  into  three  classes,  viz. : 
those  having  a  less  population  than  36,500, — those  having  a  popu- 
lation of  more  than  43,000,  —  and  those  having  a  population  be- 
tween 36,500  and  43,000. 

The  provisions  of  the  bill  apply  only  to  the  last  named  class 
of  cities.  The  difference  in  population  between  the  cities  of  the 
first  class,  having  the  minimum  population,  and  thovsc  of  the  sec- 
ond class,  having  the  maximum  population,  is  only  6,500,  and  the 
cities  of  the  third  class,  to  which  the  provisions  of  the  bill  apply, 
must  be  found  within  that  narrow  limitation. 

In  terms  the  bill  is  general,  but  no  one  is  deceived  thereby.  In 
effect,  it  is  local  and  special,  and  applies  to  but  one  city  in  the 
State, — Terre  Haute, — that  being  the  only  city  in  the  State  shown 
by  the  last  United  States  census  to  have  a  population  between  36,- 


240 

500  and  43,000.  No  other  city  in  the  State  comes  within  the  limi- 
tation named.  In  all  such  cases  the  subterfuge  of  arbitrary  classi- 
fication might  as  well  be  dispensed  with,  and  the  name  of  the  city 
sought  to  be  affected  boldly  written  into  the  bill.  The  measure 
under  consideration  might  as  well  have  contained  the  name  of 
Terre  Haute,  and  have  been  entitled,  "An  act  to  regulate  the  prac- 
tice in  certain  courts  of  justice  and  for  the  punishment  of  crimes 
and  misdemeanors  in  the  city  of  Terre  Haute."  Its  meaning  would 
have  been  exactly  the  same,  and,  in  addition,  it  would  have  been  an 
honest  declaration  of  its  purpose. 

That  such  acts  are  local  and  special  in  character  has  been  de- 
cided by  the  Supreme  Court  so  often  and  so  recently  that  the  deci- 
sions ought  to  be  fresh  in  the  minds  of  even  the  laity. 

In  re  application  of  Bank  of  Commerce,  153  Ind.  474; 

Board  v.  Spangler,  159  Ind.  579 ; 

School  City  of  Rushville  v.  Hayes,  162  Ind.  198; 

The  Town  of  Longview  v.  City  of  Crawfordsville,  No.  20,- 
274,  handed  down  January  13,  1905. 

In  the  second  case  cited  above,  an  act  of  the  General  Assembly, 
approved  March  4,  1899,  making  an  arbitrary  classification  of 
counties  between  those  having  a  population  of  15,000  and  15,050, 
according  to  the  last  Federal  census,  was  under  consideration. 
The  court  said : 

"This  court  takes  judicial  notice  of  the  population  of  the  counties  of  this 
State  according  to  the  federal  census  of  1890.  It  is,  therefore,  advised  that 
the  only  county  in  this  State  that  had  a  population  between  15,000  and 
15,050,  according  to  the  federal  census  of  1890,  was  Owen  County.  As  the 
population  referred  to  in  said  act  was  to  be  determined  according  to  a 
particular  past  census,  so  that  other  counties  could  not  subsequently  enter 
the  class,  it  is  apparent  that  by  said  act  the  General  Assembly,  in  effect, 
sought  to  provide  that  the  provisions  of  the  general  act  of  February  27,  1899, 
should  not  apply  to  certain  described  proceedings  to  improve  gravel  roads 
in  the  county  of  Owen.  *  *  *.  The  attempted  exclusion  of  pending  pro- 
ceedings for  the  improvement  of  gravel  roads  in  Owen  County  from  the 
operation  of  the  general  law  *  was  in  effect  an  attempt  to  provide 

by  a  local  law  not  alone  for  an  issue  of  bonds,  but  for  the  levy  of  a  tax  that, 
under  existing  law,  constitutes  the  means  of  retiring  such  bonds.  We  think 
that  it  was  not  competent  for  the  General  Assembly  to  make  such  exception. 
*  *  *.  As  the  subject  of  the  legislation  falls  within  Section  22,  of  Article  4, 
of  the  State  Constitution,  we  hold  that  the  proceedings  could  not  be  validated 
by  any  act  that  could  properly  be  characterized  as  local  or  special." 

The  Sixty-third  General  Assembly  enacted  nine  laws  arbitra- 
rily establishing  classifications  of  counties  and  cities  upon  differ- 
ences of  population  varying,  as  to  the  classes  legislated  for,  from 


241 

5  to  1,000.     In  considering  one  of  these  acts  in  a  recent  case,  the 
Supreme  Court  said: 

"Its  legal  foundation  is  not  mare  secure  than  if  it  had  been  declared 
to  apply  to  all  cities  and  towns  bearing  the  name  of  Rushville,  as  shown 
by  the  last  preceding  census.  The  classification  is  entirely  arbitrary  and  arti- 
ficial, and  the  plain  command  of  the  Constitution  cannot  be  evaded  by  so 
weak  and  transparent  a  device. 

Let  it  be  supposed  that  the  act  of  March  9,  1903,  supra,  is  valid,  what 
provision  of  the  Constitution  cannot  be  rendered  nugatory  by  similar  evasions? 
If  cities  and  towns  may  be  classified  according  to  trifling  differences  in 
population,  so  may  counties  and  townships.  By  means  of  statutes,  general 
in  form,  but  local  and  special  in  purpose,  resting  entirely  upon  slight  differ- 
ences in  population,  every  provision  of  Article  4,  Section  22,  of  the  Constitu- 
tion may  be  successfully  evaded. 

Inferior  in  dignity  and  force  of  obligation  only  to  the  Constitution  of  the 
United  States  and  the  acts  of  Congress  and  treaties  made  under  it,  the  State 
Constitution  is  the  supreme  law  of  the  Commonwealth.  It  is  to  be  interpreted 
and  applied  in  a  reasonable  manner;  it  is  to  be  observed  and  obeyed,  and  not 
evaded  and  defeated  by  distinctions  and  classifications  which  rest  upon  no 
rational  or  natural  basis,  and  which  deceive  no  one.  When  it  declares  that  the 
General  Assembly  shall  not  pass  local  or  special  laws  providing  for  support- 
ing common  schools  and  for  the  preservation  of  school  funds,  its  mandate 
cannot  be  defeated  by  creating  a  class  of  cities  differing  in  no  material  respect 
from  scores  of  others  in  the  State.  The  mere  convenience  of  local  communities, 
the  financial  necessities  of  particular  cities,  the  conflicting  views  of  citizens 
on  the  subject  of  the  necessity  for  the  erection  of  school  buildings,  are  not 
sufficient  to  authorize  legislation  which  the  Constitution  prohibits.  Attempted 
evasions  of  the  Constitution,  the  object  of  which  is  to  meet  and  overcome 
such  local  and  special  conditions,  cannot  be  tolerated.  A  due  regard  for  the 
highest  interests  of  the  citizens  of  the  State  requires  that  all  constitutional 
limitations  and  restrictions  shall  be  firmly  and  constantly  enforced." 
The  School  City  of  Rushville  v.  Hayes,  162  Ind.  198. 

In  the  case  of  the  Town  of  Longview  v.  City  of  Crawfords- 
ville,  supra,  construing  another  act  of  the  Sixty-third  General  As- 
sembly, in  a  decision  rendered  as  late  as  the  13th  day  of  January, 
1905,  the  same  court  said: 

"In  jurisdictions  where  classification  is  permitted  by  the  organic  law, 
it  is  settled  that  the  same,  in  order  to  furnish  a  basis  for  legislation  that  will 
exempt  it  from  the  charge  of  being  special,  must  be  a  classification  which  in 
the  nature  of  things  suggests  and  furnishes  a  reason  for,  and  justifies  the 
making  of  the  class.  The  reason  for  the  classification  must  inhere  in  the 
subject  matter,  and  the  same  must  be  natural,  not  artificial.  Under  this  rule, 
neither  mere  isolation  nor  arbitrary  selection  is  proper  classification." 

In  the  statute  above  referred  to  the  classification  made  was 
based  on  a  difference  of  1,000  in  population.     The  court  held  it  to 
be  an  arbitrary  classification,  and  in  the  course  of  its  opinion  said : 
[1«— 19801] 


242 

"Applying  these  tests  it  is  evident  that  the  classification  in  said  act  is 
merely  arbitrary  and  cannot  relieve  the  same  from  the  infirmity  of  being 
special  and  local.  There  is  no  reason  inhering  in  the  subect  matter  of  the 
act  for  giving  the  power  mentioned  therein  to  cities  of  a  population  between 
six  and  seven  thousand  according  to  the  last  preceding  United  States  census, 
and  not  giving  the  same  to  the  other  cities  in  the  State." 

In  the  measure  under  consideration  the  classification  of  cities 
is  based  upon  a  difference  in  population  of  only  6,500,  and  is, 
therefore,  clearly  within  the  rule  above  declared,  unless  there  in- 
heres in  the  subject-matter  thereof  a  reason  natural  and  not  arti- 
ficial for  the  classification.  As  we  have  seen,  the  subject-matter 
of  the  bill  is  the  regulation  of  practice  in  certain  courts  of  justice 
and  of  the  punishment  of  crimes  and  misdemeanors.  It  is  clear 
that  there  inheres  in  such  subject-matter  no  natural  reason  for  the 
making  of  a  classification  of  cities  having  no  greater  difference  in 
population  than  that  named.  There  inheres  in  the  subject  of  the 
practice  in  courts  of  justice  in  cities  under  36,500  no  natural  rea- 
son why  such  practice  should  be  regulated  by  a  different  law  in 
such  cities  than  that  which  regulates  the  practice  in  similar  courts 
in  cities  of  over  43,000 ;  nor  does  any  natural  reason  inhere  in 
the  subject-matter  of  regulating  the  practice  in  said  courts  in 
cities  having  a  population  between  36,500  and  43,000  for  a  differ- 
ent regulation  of  the  practice  in  such  courts  than  that  which  gov- 
erns in  either  of  the  other  classes  named ;  nor  is  there  any  natural 
reason  inherent  in  the  subject  of  the  punishment  of  crimes  and 
misdemeanors  upon  which  such  classification  can  be  based.  The 
classification  made  by  the  bill  is  wholly  arbitrary  and  artificial,  and 
is  based  on  no  natural  reason  inherent  in  the  subject-matter  thereof. 
It  is  true  that  arbitrary  and  artificial  classifications  may  be  made 
and  local  and  special  laws  passed  in  reference  to  certain  subjects 
not  included  in  the  seventeen  inhibitions  of  Section  22,  of  Article 
4,  of  the  Constitution,  and  that  when  so  made  the  courts  cannot 
review  the  action  of  the  Legislature.  But  the  inhibitions  in  Sec- 
tion 22  are  absolute,  and  as  to  them  the  reason  for  the  classifica- 
tion must  be  a  natural  one  and  must  inhere  in  the  subject  upon 
which  such  classification  is  based. 

There  can  be  no  doubt  of  the  local  and  special  character  of  this 
bill.  That  fact  is  established,  and  may  as  well  be  admitted.  To 
admit  the  local  and  special  character  of  the  bill,  however,  is  to  ad- 
mit its  invalidity,  if  we  keep  in  mind  the  fact  that  its  purpose  is 
the  regulation  of  the  practice  in  certain  courts  of  justice  and  of 
the  punishment  of  crimes  and  misdemeanors  in  the  city  of  Terre 
Haute. 


243 

The  Constitution  provides: 

"The  General  Assembly  shall  not  pass  local  or  special  laws  in  any  of  the 
following  enumerated  cases,  that  is  to  say:     *     *     *     j?or  the  punishment  of 
crimes  and  misdemeanors;    regulating  the  practice  in  courts  of  justice." 
Section  22,  Article  4,  State  Constitution. 

I  am  thoroughly  convinced  that  the  provisions  of  the  bill  un- 
der consideration,  making  an  arbitrary  classification  of  cities  based 
upon  a  difference  of  6,500  in  population,  concerning  a  subject  in 
which  there  is  no  natural  and  inherent  reason  for  a  classification, 
make  such  measure  local  and  special  in  character. 

I  am  equally  well  convinced,  providing  as  it  does  for  the  pun- 

ishment of  crimes  and  misdemeanors  and  for  the  regulation  of  the 

practice  in  courts  of  justice  in  the  city  of  Terre  Haute,  that  it  is 

within  the  inhibition  of  Section  22,  Article  4,  of  the  Constitution. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


SENATE  BILL  No. 

MARCH  10,  1905. 
Mr.  President  and  Gentlemen  of  the  Senate: 

I  deposit  herewith  Senate  Bill  No.  214  with  the  Secretary  of 
State  without  my  approval,  pursuant  to  the  provisions  of  the  Con- 
stitution of  the  State,  and  submit  herewith  my  reasons  for  so 
doing. 

The  bill  extends,  by  amendment,  the  provisions  of  the  act  of 
March  2,  1901,  concerning  surety  companies  and  the  securities  in 
which  they  may  invest  their  funds.  The  extension  includes  in  such 
securities  :  "Bonds  or  other  evidences  of  indebtedness,  bearing 
interest,  of  any  county,  incorporated  city,  town,  township  or  school 
district,  or  street  improvement,  sewer,  drainage  or  gravel  road 
bonds,  or  municipal  improvement  bonds,  in  any  such  State  (  where 
it  is  doing  business),  when  such  bonds  or  other  evidence  of  in- 
debtedness are  issued  by  authority  of  law,  and  on  which  interest 
has  not  been  defaulted." 

This  would  materially  change  the  character  of  the  investment 
of  surety  companies,  and  open  wide  the  door  to  the  investment  of 
the  funds  of  such  companies  in  cheap,  doubtful  and  uncertain  se- 
curities issued  by  small  municipalities  of  distant  States,  or  by  the 
townships  and  school  districts  thereof.  It  would  make  it  possible 


244 

for  such  companies  to  invest  in  such  securities  as  soon  as  issued  and 
before  there  could  be  a  default  in  the  payment  of  interest.  As  to 
the  class  of  securities  named  in  the  above  quotation,  there  is  not 
even  a  requirement  that  they  shall  have  a  current  value  of  not  less 
than  par  at  the  time  when  such  investment  is  made.  Such  restric- 
tion is  made  in  the  law  as  to  much  more  valuable  and  stable  securi- 
ties, but  it  seems  to  have  been  carefully  excluded  as  to  these.  Un- 
der the  law  of  this  State,  surety  companies  are  taken  as  surety  on 
all  kinds  of  official  bonds,  or  upon  bonds  of  any  person  acting  in  a 
fiduciary  capacity.  The  value  of  the  bond  upon  which  such  com- 
pany becomes  surety  depends  in  each  instance  wholly  upon  the 
character  and  value  of  the  securities  in  which  the  funds  of  such 
companies  are  invested,  and  the  law  ought  not  to  give  opportunity 
for  uncertain  and  questionable  investments  of  their  capital.  It  may 
be  true  that  such  companies  are  too  closely  limited  as  to  the  securi- 
ties in  which  they  may  invest  under  the  present  statute,  but  by  the 
provisions  of  the  bill  under  consideration,  practically  all  limitation 
is  removed  as  to  investments  that  may  be  made  by  them. 

I  am  convinced  that  a  due  regard  for  the  interests  of  the  pub- 
lic, who  deal  with  surety  companies,  requires  that  the  law  remain  as 
it  is,  rather  than  become  what  it  would  be  if  this  measure  were 
the  law.  That  the  law  shall  remain  as  it  is,  I  know  is  safe  so  far  as 
the  public  interests  are  concerned.  If  it  were  changed,  as  sug- 
gested, I  would  have  grave  doubts  as  to  the  safety  of  such  interests. 
I  am  fully  persuaded  that  the  evidence  of  the  indebtedness  of  a 
school  district  in  a  distant  State  is  not  the  character  of  security  in 
which  the  funds  of  such  companies  should  be  invested.  Nor  are 
street  improvement  or  sewer  bonds  of  small  municipalities  in  such 
States  safe  securities.  For  these  reasons  I  decline  to  give  my  ap- 
proval to  the  measure. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


245 
SENATE    BILL    No.    265. 

MARCH  10,  1905. 

Mr.  President  and  Gentlemen  of  the  Senate : 

I  deposit  herewith  Senate  Bill  No.  265  with  the  Secretary  of 
State  without  my  approval,  pursuant  to  the  provisions  of  the  Con- 
stitution of  the  State,  and  submit  herewith  my  reasons  for  so  doing. 

The  bill  provides  for  the  publication  of  notice  in  two  news- 
papers of  general  circulation,  of  different  politics,  of  each  item  of 
any  and  all  allowances  made  by  the  board  of  trustees  of  any  town 
or  by  the  common  council  of  any  city  having  a  population  of  less 
than  twenty-five  thousand,  within  ten  days  after  the  making  of 
such  allowances. 

Section  2  provides  a  penalty  of  from  ten  to  twenty-five  dollars 
for  any  violation  of  the  provisions  of  such  bill. 

There  is  no  public  demand  nor  necessity  for  this  measure.  If 
enacted,  it  would  conserve  no  public  purpose.  It  would  benefit  no 
one  in  any  community  except  the  publishers  of  local  newspapers 
in  the  several  towns  and  cities  to  which  its  provisions  would  apply. 
I  concede  the  value  of  local  newspapers  to  such  communities.  They 
are  worthy  of  consideration  and  encouragement.  They  are  not, 
however,  entitled  to  consideration  and  encouragement  at  the  ex- 
pense of  the  several  municipal  treasuries  of  the  State.  Public  funds 
raised  by  taxation  ought  not  to  go  for  any  purpose  other  than  a 
public  one. 

It  is  urged  that  publicity  will  prevent  extravagant  and  fraud- 
ulent allowances,  and  the  law  requiring  township  trustees  to  pub- 
lish annually  a  statement  of  public  expenditures  is  referred  to  as 
a  justification  for  the  measure  under  consideration. 

It  is  true  that,  under  existing  law,  township  trustees  are  re- 
quired to  publish  an  account  of  their  expenditures.  But  this  is  re- 
quired only  once  a  year.  The  position  of  township  trustee  differs 
materially  from  that  of  town  boards  and  city  councils.  The  town- 
ship trustee  generally  lives  in  a  rural  district.  He  is  more  or  less 
isolated.  The  people  are  separated  from  him  by  distances  of 
greater  or  less  length.  Many  of  his  official  acts  are  done  in  pri- 
vate. There  is  little  opportunity  for  the  taxpayers  of  the  town- 
ship to  know  what  expenditures  he  is  making.  For  these  reasons 
there  is  some  justification  for  the  existing  law  requiring  him  to 
make  publication  once  a  year  of  such  expenditures.  It  is  doubtless 
true,  also,  that  the  fact  that  he  is  required  to  make  publication  of 


246 

such  expenditures  has  a  restraining  influence  upon  him,  and  that 
the  law  has  done  something  to  prevent  extravagant  expenditure  of 
township  money.  But  the  law  has  been  the  subject  of  no  inconsid- 
erable abuse  through  the  separation  of  items,  resulting  in  an  in- 
creased number  of  items  for  publication,  to  the  profit  of  the  local 
newspapers  and  the  detriment  of  the  township. 

Trustees  of  towns  and  common  councils  of  cities  are  not  so  sit- 
uated. They  meet  at  fixed  and  stated  intervals.  They  have  a  des- 
ignated place  of  meeting.  The  public  is  advised  of  the  time  and 
place  of  such  meetings.  No  expenditure  of  public  money  can  be 
made  or  authorized  except  in  open  sessions  of  such  boards  duly 
convened.  The  places  of  meeting  for  such  bodies  are  convenient  of 
access.  The  population  of  towns  and  cities  is  centralized,  and 
every  opportunity  is  given  the  citizens  of  such  municipalities  to 
know  exactly  what  expenditures  are  being  made.  Every  allowance 
made  is  practically  made  in  the  presence  of  the  people  whose  money 
supplies  the  fund  from  which  payment  is  made.  Opportunity  for 
debate  and  discussion  is  always  present.  A  record  is  required  to 
be  made  of  every  allowance.  This  record  is  open  to  the  inspection 
of  any  taxpayer. 

Under  the  provisions  of  the  bill  filed  herewith,  every  item  allowed 
by  any  such  board  is  required  to  be  published  in  two  newspapers,  if 
there  be  such  newspapers  in  such  city  or  town,  at  an  expense  of  five 
cents  per  item  for  each  paper,  within  ten  days  after  such  allowance 
is  made.  This  would  necessitate  repeated  notice  of  partial  pay- 
ments and  would  multiply  the  expense  many  times  beyond  what  it 
would  be  if  notice  of  such  allowances  was  required  to  be  made  at 
the  close  of  the  year.  For  example:  If  John  Smith  is  employed 
by  the  town  or  city  as  a  laborer  upon  its  streets  and  an  allowance 
is  made  to  him  therefor,  it  must  be  immediately  published.  In 
most  towns  and  cities  of  the  State,  the  boards  of  trustees  and  the 
city  councils  meet  at  least  once  each  month,  and  in  many  of  them 
twice  each  month.  Every  allowance  made  to  John  Smith  for  labor 
upon  the  streets  of  any  such  town  or  city  must  be  published  as 
a  separate  item  within  ten  days  after  it  is  made.  If  he  is  employed 
a  single  day  each  week  during  the  year,  25  different  publications 
will  be  required,  at  a  cost  of  $2.50.  The  same  is  true  of  every  other 
laborer  upon  the  streets  of  any  such  town  or  city.  The  only  pur- 
pose of  this  expenditure  is  to  inform  the  taxpayers  that  Smith 
has  been  paid, — a  fact  of  which  every  taxpayer  has  had  ample  op- 
portunity to  know  without  publication. 

In  my  judgment  the  benefit  to  the  public  is  not  worth  the  cost. 


247 

And  this  is  especially  true  in  view  of  the  fact  that  every  such 
allowance  must  be,  and  in  fact  is,  made  openly,  on  motion,  by  a 
public  body  in  a  public  meeting  of  which  general  knowledge  ex- 
ists, and  to  which  every  taxpayer  may  go,  and  to  which  many  do 
actually  go.  Here  is  another  example:  A  city  employs  120  school 
teachers.  Their  salaries  are  paid  monthly.  Each  such  payment 
is  made  up  of  120  items.  Such  publication,  therefore,  will  be 
required  once  a  month  for  as  many  months  as  constitute  the  school 
year  in  such  city,  which  is  usually  from  eight  to  nine  months.  If 
such  school  year  is  nine  months  in  length,  the  items  of  salary  al- 
lowance to  teachers  alone,  if  made  monthly,  will  aggregate  1,080. 
At  10  cents  per  item  for  each  publication  the  total  cost  of  such 
publications  in  such  city  is  $108.00.  What  value  has  the  public 
received  for  this  expenditure?  Absolutely  nothing  beyond  the  in- 
formation that  the  school  board  has  paid  the  several  teachers  of 
the  city  the  salaries  which  were  fixed  by  written  contracts,  of  which 
contracts  public  record  was  made  before  the  term  of  service  of  any 
of  such  teachers  began.  This  is  but  one  instance.  I  repeat,  the  in- 
formation is  not  worth  the  cost. 

This  measure,  if  it  became  a  law,  would  involve  the  expenditure 
by  the  various  towns  and  cities  to  which  it  would  apply  of  from 
$100.00  to  $1,000.00  per  annum,  for  which  the  taxpayers  would 
receive  substantially  no  return.  When  we  consider  the  number  of 
towns  and  cities  in  the  State  that  would  be  subject  to  the  provisions 
of  the  bill,  we  can  at  least  roughly  estimate  the  cost.  The  aggre- 
gate of  such  expenditures  would,  in  the  course  of  a  year,  reach  a 
startling  sum.  I  know  of  no  way  in  which  I  can  better  serve  the 
citizens  of  such  municipalities  than  by  withholding  executive  ap- 
proval from  such  a  measure.  I  do  not  undervalue  the  newspapers 
of  these  several  communities.  I  know  they  would  profit  by  the 
measure  if  it  were  the  law.  But  I  am  a  public  servant  of  the  pub- 
lic interest  and  not  a  private  servant  of  private  interests.  I 
therefore  decline  to  sign  the  bill. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


248 
SENATE    BILL    No.    306. 

MARCH  10,  1905. 
Mr.  President  and  Gentlemen  of  the  Senate: 

I  deposit  herewith  Senate  Bill  No.  306  with  the  Secretary  of 
State  without  my  approval,  pursuant  to  the  provisions  of  the  Con- 
stitution of  the  State,  and  submit  herewith  my  reasons  for  so  doing. 

The  bill  appropriates  $500  for  such  printing  and  stationery  as 
may  be  required  by  the  "Assistant  Adjutant-General  and  Assist- 
ant Quartermaster-General  of  the  Department  of  Indiana,  Grand 
Army  of  the  Republic,"  to  be  procured,  through  the  Commissioners 
of  Public  Printing,  of  the  State  Printer,  to  be  paid  out  on  vouch- 
ers approved  by  said  Commission  and  said  officers. 

This  seems  to  me  to  be  a  most  extraordinary  appropriation  of 
public  funds.  It  is  one  to  which  I  have  given  much  consideration, 
for  I  have  been  impelled  by  sympathy  and  gratitude  to  give  it  my 
approval,  but  I  am  unable  to  do  so. 

I  have  the  highest  possible  regard  and  esteem, — amounting  al- 
most to  veneration, — for  the  men  who  constitute  the  Grand  Army  of 
the  Republic.  The  story  of  their  services  and  valor  is  linked  for- 
ever with  the  history  of  the  Nation's  life.  The  debt  the  present 
generation  owes  them  can  never  be  fully  paid.  Of  this  I  am  keenly 
conscious.  The  memory  of  what  they  did  and  what  they  wrought 
in  behalf  of  constitutional  government,  makes  it  hard  for  me  to 
do  my  duty  in  this  matter.  It  would  be  far  easier  for  me  to  sign 
the  bill  and  allow  it  to  become  a  law,  than  to  withhold  executive 
approval  from  it.  And  I  would  do  so  were  I  not  convinced  that 
by  so  doing  I  would  betray  my  trust,  set  a  dangerous  precedent  and 
do  an  unconstitutional  thing.  These  considerations,  and  these 
alone,  prevent  my  signing  it.  Neither  sympathy  nor  grateful  re- 
membrance can  justify  one  in  my  position  for  the  doing  of  an  act 
unwarranted  by  the  law  of  the  land  which,  with  uplifted  hand,  he 
has  sworn  to  support. 

The  Grand  Army  of  the  Republic,  however  noble  its  prupose 
and  splendid  its  services,  under  the  law  of  the  State,  has  no  offi- 
cial relation  to  the  State.  It  performs  no  service  for  the 
State,  which  can  be  recognized  by  the  appropriation  of  public 
funds  for  its  benefit.  It  serves  the  State,  and  serves  it  greatly, 
by  keeping  alive  the  memories  of  the  sacrifice  and  devotion  made 
by  its  members  in  behalf  of  the  land  in  which  we  live  and  in  de- 
fense of  the  flag  we  love,  and  by  planting  in  the  hearts  and  incul- 


249 

eating  in  the  minds  of  the  children  who  are  to  be  the  men  and 
women  of  tomorrow  a  reverence  for  lofty  devotion  and  the  lessons 
of  patriotism ;  and  by  maintaining  the  general  observance  of  the 
most  sacred  day  in  the  national  calendar, — Memorial  Day ;  but 
these  are  services  for  which,  under  the  law  of  the  land,  no  money 
compensation  can  be  made  out  of  the  public  funds. 

Every  church,  every  social,  benevolent,  or  fraternal,  or  civil  or- 
der, in  greater  or  less  degree  serves  the  State  in  the  same  way. 
There  is  no  more  warrant  in  law  for  the  appropriation  of  public 
funds  to  defray  the  expenses  of  the  officers  of  the  State  Depart- 
ment of  the  Grand  Army  of  the  Republic,  than  there  is  for  the 
appropriation  of  public  funds  to  meet  the  expenses  of  the  annual 
conferences  of  the  several  churches  of  the  State,  or  of  the  officers 
of  the  grand  lodges  of  the  various  civic  orders  of  the  State,  such 
as  the  Knights  of  Pythias,  the  Independent  Order  of  Odd  Fellows, 
or  the  various  Masonic  bodies. 

It  has  been  suggested  to  me  that  the  appropriation  is  small, — 
only  $500.00.  But  the  precedent,  if  I  were  to  sign  the  bill,  would 
be  far-reaching  and  lasting  in  its  effect.  A  bad  precedent  founded 
upon  a  small  appropriation  is  as  dangerous  and  far-reaching  as 
though  founded  upon  a  large  appropriation.  Such  a  precedent  as 
this,  if  established,  might  be  considered  warrant  for  an  appropria- 
tion of  public  funds  for  the  payment  of  all  the  expenses  of  the 
State  Department  of  the  Grand  Army  of  the  Republic,  including 
the  salaries  of  its  officers.  The  power  to  do  the  one  implies  the 
power  to  do  the  other,  and  the  policy  of  the  one  necessarily  in- 
cludes the  policy  of  the  other. 

It  suggests  a  door  that  must  not  be  opened.  It  is  against  pub- 
lic policy.  It  is  also  against  the  best  interests  of  the  Grand  Army 
of  the  Republic.  That  organization  will  hold  a  higher  place  in 
the  hearts  and  affections  of  the  people  if  it  does  not  become  the 
recipient  of  public  funds  appropriated  in  defiance  of  the  Consti- 
tution of  the  State.  Its  members  fought  on  many  fields  to  preserve 
the  Constitution  not  only  of  the  national  government,  but  of  the 
State  as  well,  and  they  ought  not  now  to  ask  either  the  Legislature 
or  the  Chief  Executive  of  the  State  to  violate  that  Constitution. 

What  I  have  said  implies  the  unconstitutionality  of  the  meas- 
ure. That  it  is  unconstitutional  is  so  clear  to  me  that  no  doubt 
remains.  The  appropriation  is  an  appropriation  of  public  funds 
for  the  use  of  private  persons.  It  may  be  said  that  the  Assistant 
Adjutant-General  and  the  Assistant  Quartermaster-General  of  the 
Department  of  Indiana  of  the  Grand  Army  of  the  Republic,  are 


250 

not  private  persons,  but  officers  of  the  civic  order  to  which  they 
belong.  That,  however,  is  not  an  accurate  statement.  Under  the 
law,  they  are  private  persons.  They  are  not  officials  of  the  State. 
They  have  no  official  connection  with  the  Svtate.  In  contempla- 
tion of  law  they  serve  the  State  in  no  way.  Whatever  positions 
they  may  hold  in  the  order  named,  they  are  simply  private  citizens 
in  law.  The  order  to  which  they  belong  is  not  a  department  of 
the  State  government;  but,  on  the  contrary,  it  is  a  civic  order, 
private  in  character. 

I  have  recently  had  occasion  to  veto  certain  measures  passed 
by  the  General  Assembly,  appropriating  money  of  the  people, — 
public  funds, — for  the  purpose  of  reimbursing  certain  public  officers 
for  moneys  of  the,  public  lost  by  them,  on  the  ground  that  such 
appropriations  were  for  the  use  of  private  persons,  and  beyond 
the  purposes  of  taxation  contemplated  by  the  Constitution. 

That  the  General  Assembly  has  no  constitutional  power  to 
make  an  appropriation  of  public  funds  raised  by  taxation  for  a 
private  purpose,  or  for  the  use  of  a  private  individual,  is  agreed 
by  all  the  authorities. 

In  the  case  of  McClelland,  trustee,  v.  The  State,  ex  rel.  Speer, 
138  Ind.  321,  it  was  held  that  the  levying  of  taxes  upon  the  prop- 
erty of  a  township  to  create  a  fund  for  a  private  and  not  a  public 
use,  was  without  the  Constitution.  In  that  case  the  court  said : 

"Here  was  an  unconstitutional  discrimination  between  citizens,  in  this, 
that  the  act  arbitrarily  requires  the  taxpayers  of  Wayne  township  to  give  to 
the  relator  the  sum  of  $2,812.90  and  fastens  upon  the  township  and  its  tax- 
payers a  debt  for  that  amount,  for  which  the  township  never  received  any- 
thing and  for  which  it  never  gave  its  consent  or  contracted  a  liability.  In 
our  opinion  the  General  Assembly  is  not  vested  with  power  to  legislate  a 
tax  upon  the  people  of  a  township  for  a  private  purpose." 

In  passing  upon  the  question  of  what  is  a  public  use,  the  court 
in  the  above  case  aptly  said : 

"We  think  the  law  is  well  settled  that  nothing  can  fairly  be  regarded  as 
a  public  use,  unless  it  has  a  state  use  or  a  national  use  in  furtherance  of  a 
state  use.  To  defray  the  necessary  expenses  of  a  township,  or  to  make 
necessary  improvements  in  a  township,  is  a  state  or  public  use.  But  the  dona- 
tion of  a  large  sum  of  money  to  the  relator  in  this  case  cannot  be  regarded  as 
a  public  use  of  money." 

The  word  "tax"  of  itself  implies  a  public  purpose.  Properly 
defined,  it  is : 

"An  enforced  proportional  contribution  levied  on  persons,  property  or 
income,  either  (a)  by  the  authority  of  the  State  for  the  support  of  the  gov~ 


251 

eminent  and  for  all  its  public  or  governmental  needs,  or  (b)  by  local  authori- 
ties for  general  municipal  purposes." 

This  definition  furnishes  no  room  or  shelter  for  an  appropria- 
tion of  public  funds  for  the  use  of  any  person  or  organization  that 
has  no  claim  upon  the  State,  or  to  whom  no  legal  obligation  is  due. 

A  public  statute  cannot  be  valid  which  is  intended  to,  and  does 
in  effect,  so  tax  an  individual  as  to  take  private  property  for  pri- 
vate use.  Such  an  appropriation  is  a  gift,  pure  and  simple.  To 
warrant  taxation  the  purpose  must  not  only  be  beneficial,  but  it 
must  concern  the  public.  A  merely  private  benefit  is  not  enough. 
Under  a  free  government,  when  no  public  considerations  are  in- 
volved, every  man  must  be  allowed  to  choose  for  himself  when  it 
comes  to  the  giving  of  money.  As  already  suggested,  taxation,  by 
the  very  meaning  of  the  term,  implies  the  raising  of  money  for 
public  use  and  excludes  the  raising  of  it  for  private  objects  and 
purposes.  The  acquisition,  possession  and  protection  of  property 
are  among  the  chief  ends  of  government.  To  take,  directly  or  in- 
directly, the  property  of  individuals  to  give  to  others,  is  to  with- 
draw it  from  the  protection  of  the  Constitution  and  submit  it  to 
the  will  of  an  irresponsible  majority. 

It  is  true  that  the  bill  does  not  contemplate  the  levy  of  a  tax 
upon  the  property  of  the  citizens  of  the  State,  from  which  to  cre- 
ate a  fund  with  which  to  meet  the  appropriation  it  makes.  But 
there  is  no  distinction  in  principle  between  the  appropriation  of 
public  funds  already  raised  by  taxation  and  the  laying  of  a  tax 
for  the  creation  of  a  fund  for  such  an  appropriation.  If  the  Gen- 
eral Assembly  has  no  power  to  legislate  a  tax  upon  the  people  of 
the  State  for  a  private  purpose,  it  has  no  power  to  take  the  funds 
of  the  State,  which  have  been  raised  by  a  tax  levied  upon  the  peo- 
ple of  the  State,  and  appropriate  them  to  a  private  purpose.  If 
it  is  inhibited  from  laying  a  tax  for  a  private  purpose,  it  must 
necessarily  be  inhibited,  on  like  principle  and  for  like  reasons,  from 
appropriating  for  a  private  purpose  the  money  which  has  been 
raised  by  taxation.  In  either  case  it  is  taking  the  property  of  one 
man  to  bestow  it  upon  another,  and  this  is  clearly  within  the  con- 
stitutional inhibition  that  no  man's  property  shall  be  taken  without 
due  process  of  law. 

Respectfully  submitted, 

J.   FRANK   HANLY, 

Governor. 


House  Veto  Messages,  Sixty-Fourth 
General  Assembly 


(253) 


255 
HOUSE   BILL  No.   39. 


FEBRUARY  22,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  39  without  my  approval. 

This  bill  provides  for  the  reimbursement  of  certain  ex-trustees 
of  seven  several  townships  of  Dekalb  County,  out  of  the  public 
funds  of  said  respective  townships,  for  certain  sums  of  money  re- 
spectively paid  by  them  to  their  said  several  townships  on  account 
of  township  funds  received  by  them,  as  trustees  of  their  said  re- 
spective townships,  and  deposited  in  certain  banking  institutions, 
which  sums  were  lost  to  them  through  the  failure  of  such  institu- 
tions. 

These  sums  range  from  $195  in  one  instance  to  $2,323.97  in 
another,  and  amount  in  the  aggregate  to  $6,961.30. 

Other  bills  providing  for  the  reimbursement  of  other  public 
officials  of  Dekalb  County  for  public  moneys  lost  in  like  manner 
have  received  the  sanction  of  the  General  Assembly.  The  aggre- 
gate appropriation  of  public  funds  belonging  to  the  citizens  of 
this  county  made  by  bills  already  passed  exceeds  $18,000. 

Similar  bills  for  the  relief  of  certain  other  township  and  county 
officers  of  Steubcn,  Elkhart,  Jasper,  Laporte  and  Lagrange  coun- 
ties, on  account  of  similar  losses,  have  passed  both  houses  of  the 
General  Assembly.  The  aggregate  appropriations  of  funds  of 
these  several  counties  and  the  several  townships  thereof,  made  by 
the  several  measures  already  passed,  are  more  than  $65,000.  This 
is  a  goodly  sum  to  give  away.  And  yet,  as  shown  by  the  calen- 
dars of  the  respective  houses  of  the  General  Assembly,  other  meas- 
ures having  like  provisions  and  like  purposes  are  far  on  their  way 
toward  legislative  approval.  I  am  unable  to  state  with  accuracy 
the  amount  of  the  aggregate  appropriations  carried  by  these  sev- 
eral pending  bills,  but  the  grand  total  of  such  appropriations  made 
by  these  bills,  passed  and  pending,  is  startling  Jn  amount,  and  is 
certainly  sufficient  to  challenge  the  thoughtful  consideration  of 
every  member  of  the  General  Assembly. 

The  character  of  this  legislation,  the  number  of  public  officials 
relieved  of  just  and  solemn  obligation,  and  the  great  sum  of  money 
appropriated  by  it  in  the  aggregate  from  the  treasuries  of  the  sev- 
eral townships  and  counties  affected  and  placed  in  the  pockets  of 
private  individuals  as  a  gift,  have  caused  me  to  consider  with 


256 

thoughtful  care  two  questions  which  seem  to  me  to  go  to  the  very 
heart  of  each  of  these  measures. 

First.  Does  sound  public  policy  admit  of  such  an  appropria- 
tion of  the  public  funds  of  a  township  or  county? 

Second.  Is  such  legislation  inhibited  by  the  Constitution  of 
the  State? 

I  am  compelled  to  answer  the  first  of  these  questions  in  the  neg- 
ative. A  public  policy  which  relieves  from  liability  a  public  offi- 
cial who  makes  a  deposit  of  public  funds  entrusted  to  his  care  in 
a  bank  which  fails,  and  in  which  failure  such  funds  are  lost  to 
him,  is  unsound  and  dangerous.  If  such  policy  be  generally  adopt- 
ed and  long  continued,  it  will  inevitably  beget  loose  and  careless 
administration,  multiply  such  losses  and  mulct  the  people  daily 
by  the  use  of  public  funds  raised  by  taxation  to  recoup  private 
losses. 

Between  each  of  the  several  trustees  named  as  beneficiaries  in 
the  bill  returned  herewith  and  the  people  of  their  respective  town- 
ships there  was  an  implied  contract.  A  contract  none  the  less  bind- 
ing and  sacred  because  it  was  unwritten.  On  the  one  part  this 
contract  required  each  of  said  officers  to  faithfully  discharge  his 
duties  as  such  official  and  account  to  his  township  for  all  moneys 
belonging  to  such  township  and  coming  into  his  hands.  On  the 
other  side  it  required  the  people  to  pay  him  the  salary  fixed  by  law. 
Then,  in  addition,  that  the  assurance  on  his  part  might  not  fail, 
the  law  required  from  him  a  solemn  and  binding  written  contract 
with  surety  that  he  would  faithfully  discharge  his  duties  and  ac- 
count for  all  moneys  belonging  to  his  township  which  should  come 
into  his  hands.  The  amount  of  money  received  by  him  measured 
his  liability.  He  was  bound,  as  a  public  officer,  to  keep  the  funds 
in  his  hands  safely.  He  was,  in  fact,  an  insurer  of  the  safety  of 
the  funds  in  his  hands  and  was  bound  to  account  for  the  moneys 
lost  by  him,  though  lost  without  his  fault. 

Good  morals  and  a  sound  public  policy  require  that  these  con- 
tracts, both  the  implied  and  the  written  one,  shall  be  kept,  and  that 
there  shall  be  no  impairment  of  either  of  them,  and  that  there  shall 
be  no  relief  from  the  penalties  by  them  imposed. 

When  the  beneficiaries  named  in  this  bill  sought  and  obtained 
their  respective  offices  they  knew  the  obligation  they  would  be  re- 
quired to  assume.  They  knew,  also,  the  hazards  they  would  incur, 
and  that  the  extent  of  their  liability  would  be  measured  by  the 
amount  of  money  coming  into  their  hands.  Knowing  this  they 
were  not  deterred  from  accepting  their  several  trusts.  On  the  con- 


257 

trary,  they  chose  to  qualify  and  to  enter  upon  the  discharge  of 
their  respective  duties. 

Having  entered  upon  the  discharge  of  such  duties,  they  were 
not  compelled  by  any  public  necessity  to  withdraw  in  bulk  the  funds 
due  their  several  townships  from  the  county  treasury.  They  could 
have  left  them  there  until  required  for  public  use.  While  such 
funds  were  in  the  county  treasury  they,  as  township  trustees, 
would  have  carried  no  hazard  of  their  loss,  nor  would  they  have 
incurred  any  liability  had  they  been  lost  while  in  such  treasury. 
They  chose  to  remove  them  in  bulk  and  in  larger  sums  than  public 
necessity  required  and  to  place  them  on  deposit  in  banks  of  their 
own  choice.  These  banks  failed.  The  loss  of  funds -so  deposited 
was  their  respective  individual  loss.  The  deposit  of  money  in  such 
banks  was  their  affair  and  not  the  public's.  Knowing  the  law, 
they  chose  to  carry  the  hazard,  to  assume  the  risk  and  to  accept  the 
liability  consequent  upon  loss,  and  now,  that  such  loss  has  come 
upon  them,  they  are  in  no  position  to  ask  relief  from  the  require- 
ments imposed  upon  them  by  the  law.  They  have  no  claim,  either 
moral,  legal  or  equitable. 

As  to  the  second  question,  the  inhibition  of  the  Constitution 
against  such  measures  as  these  is  too  clear  to  admit  of  serious  de- 
bate. 

The  decision  of  the  Supreme  Court  in  the  case  of  Mount,  trus- 
tee, v.  The  State,  ex  rel.  Richey,  90  Ind.  29,  has  been  cited  in  sup- 
port of  the  constitutionality  of  the  bill  by  its  friends  and  by  the 
friends  of  the  several  kindred  measures  hereinbefore  referred  to.  I 
have  given  consideration  to  that  decision.  It  was  written  by  a 
learned  and  eminent  judge,  in  whose  ability  and  learning  I  have 
very  great  confidence.  The  decision  is  in  point  and  the  bill  is 
clearly  within  the  rules  there  declared. 

I  am  thoroughly  convinced,  however,  that  the  decision  is  wrong 
In  principle;  that  it  is  opposed  to  the  great  weight  of  judicial 
decision  upon  the  question  involved;  that  it  rests  upon  a  false 
premise,  involving  mixed  questions  of  law  and  fact;  and  that  it 
has  been  modified,  if  not  overruled  by  implication,  in  a  subsequent 
decision  of  the  Supreme  Court,  and  that  it  has  ceased  to  be  the  law. 
In  fact,  it  never  ought  to  have  been  the  law. 

The  bill  recites  that  the  officials  named  therein  have  paid  to 
their  respective  townships  the  several  sums  lost  by  them.  Since  do- 
ing that  they  have  ceased  to  hold  their  respective  offices.  They 
occupy  to  their  respective  townships,  as  to  the  moneys  lost  and 
made  good  by  them,  the  position  neither  of  debtors  or  creditors. 
[17—19891] 


258 

They  have  no  right  in  law  or  in  equity  to  a  return  of  their  money. 
In  the  absence  of  special  legislation  for  the  purpose  such  money 
can  not  be  returned  to  them.  A  return  of  it  would  amount  to  noth- 
ing but  a  gift,  pure  and  simple, — a  gift,  too,  of  public  money  for  a 
private  purpose. 

That  the  General  Assembly  has  no  constitutional  power  to  make 
an  appropriation  of  public  funds  raised  by  taxation  to  a  private 
purpose  is  agreed  by  all  authorities.  This  is  conceded  in  the  de- 
cision in  the  90th  Ind.,  above  cited.  On  this  point  I  submit  the 
language  of  the  decision : 

"It  is,  perhaps,  true  that  the  legislature  cannot  authorize  the  assessment 
of  a  tax  for  a«mere  private  purpose  *  *  *." 

The  writer  of  the  opinion  states  the  basis  of  the  decision  as 
follows : 

"Reimbursing  a  public  officer  for  the  loss  of  public  funds,  occurring  while 
"he  is  engaged  in  discharging  public  official  duties,  cannot  be  deemed  an  appro- 
priation to  private  purposes." 

This  is  the  sole  basis  of  the  decision,  and  the  pith  and  point  of 
the  decision  itself  is  embraced  in  the  following  sentence: 

"We  do  no  more  than  decide  that  the  legislature  has  power  to  direct  the 
application  of  township  funds  to  the  payment  of  claims  growing  out  of  the 
discharge  of  official  duties  by  the  trustee  where  the  claims  are  of  a  public 
nature." 

The  premise  stated  above  is  a  mistaken  one.  It  involves  two 
mixed  questions  of  law  and  fact,  both  of  which  are  erroneous : 

First.  It  assumes  that  the  money  was  lost  by  the  trustee  "while 
engaged  in  discharging  public  official  duties." 

Second.  It  declares  that  an  appropriation  reimbursing  a  trus- 
tee for  the  loss  of  public  funds  "cannot  be  deemed  an  appropria- 
tion for  a  private  purpose." 

When  the  trustee  drew  the  money  from  the  treasury  in  bulk 
and  before  it  was  needed  to  meet  the  public  expenses  of  his  trust, 
and  deposited  it  in  a  bank,  he  was  not  engaged  in  the  discharge 
of  any  public  official  duty.  No  duty  he  owed  to  the  public  and  no 
duty  imposed  upon  him  by  law  required  him  to  withdraw  the  money 
from  the  county  treasury  in  bulk  before  there  was  a  necessity  to 
pay  it  out  for  the  public  benefit  and  deposit  it  in  a  bank.  That 
act  was  a  private  act  in  which  the  public  was  not  concerned.  It 
was  done  either  for  his  own  convenience  or  profit. 

If,   having  made   this   disposition   of  the  money,   he   loses   it 


259 

through  the  failure  of  the  bank,  he  is  liable  for  the  loss.  His  bond 
is  also  liable.  He  or  his  bondsmen  must  make  it  good.  Knowing 
his  liability  and  the  liabilily  of  his  bondsmen,  he  does  make  it  good 
by  restoring  to  the  public  fund  the  sum  lost.  This  done,  the  trans- 
action is  closed.  It  never  was  at  any  time  a  public  official  act,  but 
the  private  act  of  a  public  official,  which  was  not  required  by  law  or 
by  any  duty  he  owed  to  the  public.  But  whatever  the  act, — private 
or  official, — the  transaction  is  a  closed  incident.  The  township  has 
lost  nothing.  The  books  are  square.  He  has  no  claim.  The  town- 
ship has  no  claim.  He  goes  out  of  office  with  a  clean  account. 

It  is  in  that  condition  that  we  find  him.  While  he  is  in  that 
condition,  it  is  proposed  to  do  what?  To  appropriate  public 
money  to  pay  an  obligation  which  the  public  owes  to  him  ?  Not  so. 
The  public  owes  him  no  obligation,  legal,  moral  or  equitable.  But 
it  is  proposed  to  appropriate  public  funds,  raised  by  a  tax  upon 
the  property  owned  by  the  people  of  the  township,  to  make  him 
a  gift  for  his  private  and  personal  benefit,  the  only  basis  of  which 
is  public  sympathy  for  a  private  misfortune.  To  say  that  such 
an  appropriation  of  public  funds  made  under  such  circumstances 
is  for  a  public  and  not  a  private  purpose,  is  to  distort  a  self-evident 
truth, — one  so  plain  that  there  is  room  for  neither  cavil  nor  dispute. 

The  foundation  upon  which  the  decision  is  based,  it  will  be  ob- 
served, melts  away  under  analysis  and  leaves  no  grain  of  fact  or 
truth  upon  which  it  may  rest,  and  the  decision  itself  must  therefore 
fall. 

It  will  be  remembered  that  in  the  language  of  the  court  itself 
the  opinion  does  "no  more  than  decide  that  the  Legislature  has 
power  to  direct  the  application  of  township  funds  to  the  payment 
of  claims  growing  out  of  the  discharge  of  official  duties  by  the 
trustee,  where  the  claims  are  of  a  public  nature." 

Neither  the  claim  in  the  Mount  case,  supra,  nor  any  of  the 
claims  now  under  consideration  grew  out  of  the  discharge  of  offi- 
cial duties,  nor  was  said  claim  or  any  of  these  of  a  public  nature. 

These  considerations  led  the  Supreme  Court  to  correct  the  above 
decision,  in  the  case  of  McClelland,  trustee,  v.  The  State,  ex  rel. 
Speer,  138  Ind.  321,  and  to  decide  that  the  levying  of  taxes  upon 
the  property  of  a  township  to  create  a  fund  to  reimburse  a  trustee 
for  money  lost  under  such  circumstances,  would  be  the  taxing  of 
the  property  of  the  citizens  of  the  township  for  a  private  and  not  a 
public  use. 

In  that  case  the  court  said : 


260 

"Here  was  an  unconstitutional  discriminulion  between  citizens,  in  this, 
that  the  act  arbitrarily  requires  the  taxpayers  of  Wayne  township  to  give 
the  relator  the  sum  of  $2,812.90  and  fastens  'upon  a  township  and  its  tax- 
payers a  debt  for  that  amount,  for  which  the  township  never  received  any- 
thing and  for  which  it  never  gave  its  consent  nor  contracted  a  liability.  .  In 
our  opinion  the  General  Assembly  is  not  vested  with  power  to  legislate  a 
tax  upon  the  people  of  a  township  for  a  private  purpose." 

It  is  urged  that  in  the  McClelland  case,  just  cited,  the  question 
involved  was  different  from  the  question  involved  in  the  Mount 
case,  supra,  in  that  the  money  lost  by  the  trustee  in  the  McClelland 
case  was  not  raised  by  taxation  upon  the  property  of  the  people  of 
Hie  township  whose  property  it  was  proposed  to  assess  to  create 
the  fund  with  which  to  reimburse  the  trustee.  In  part  that  is  true, 
but  not  wholly  so.  A  part  of  the  funds  lost  by  him  were  raised  by 
taxation  upon  the  people  of  the  township  whose  property  the  Leg- 
islature proposed  to  retax  for  the  purpose  of  creating  a  fund  with 
which  to  reimburse  such  trustee. 

In  deciding  this  branch  of  the  case,  the  court  declares  the  rule 
to  be  directly  the  opposite  to  the  rule  declared  in  the  Mount  case. 

In  passing  upon  the  question  of  what  is  a  public  use,  the  court, 
in  the  McClelland  case,  aptly  said : 

"We  think  the  law  is  well  settled  that  nothing  can  fairly  be  regarded  as  a 
public  use,  unless  it  has  a  state  use  or  a  national  use  in  furtherance  of  a  state 
use.  To  defray  the  necessary  expenses  of  a  township,  or  to  make  necessary 
improvements  in  a  township,  is  a  state  or  public  use.  But  the  donation  of  a 
large  sum  of  money  to  the  relator  in  this  case  cannot  be  regarded  as  a  public- 
use  of  money." 

It  is  true  that  in  the  above  case  the  act  provided  for  the  levy 
of  a  tax  upon  the  property  of  the  citizens  of  the  township  from 
which  to  create  a  fund  with  which  to  reimburse  the  trustee,  there 
being  no  funds  in  the  township  treasury  out  of  which  he  could  be 
reimbursed.  We  submit,  however,  that  there  is  no  distinction  in 
principle  between  that  case  and  the  case  involved  in  this  bill.  If 
the  General  Assembly  has  no  power  to  legislate  a  tax  upon  the 
people  of  a  township  for  a  private  purpose,  it  has  no  power  to 
take  the  funds  of  a  township  which  have  been  raised  by  a  tax  levied 
upon  the  property  of  the  people  of  such  township,  and  appropriate 
them  to  a  private  purpose.  If  the  General  Assembly  is  inhibited 
from  laying  a  tax  for  a  private  purpose,  it  must  necessarily  be 
inhibited,  on  like  principle  and  for  like  reasons,  from  appropriating 
for  a  private  purpose  the  money  which  has  been  raised  by  taxation. 

The  levying  of  a  tax,  or  the  appropriation  of  money  raised  by 


261 

taxation,  for  the  reimbursing  of  the  trustees  named  in  this  bill, 
would  be,  in  effect,  taking  the  property  of  one  man  to  bestow  it 
upon  another.  In  effect,  it  would  be  a  taking  of  the  property  of 
the  citizens  of  the  several  townships  affected,  for  a  private  and  not 
a  public  use.  It  would  be,  in  plain  English,  a  robbery  and  a  spoli- 
ation of  the  citizens  of  such  townships  for  the  benefit  of  the  seven 
individuals  named  as  beneficiaries  in  the  bill, — a  robbery  and  a 
spoliation  for  which  no  warrant  can  be  found  in  the  Constitution 
of  the  State,  in  law,  in  equity  or  in  the  conscience  of  honest  men. 

That  this  bill  is  an  attempt  to  make  an  appropriation  of  public 
funds  for  a  private  purpose,  and,  in  effect,  to  take  private  prop- 
erty for  private  use,  through  the  appropriation  of  public  funds 
which  have  been  raised  by  taxation,  and  that  such  an  attempt  is 
unconstitutional,  is  well  established  by  judicial  decision.  In  fact, 
there  is  almost  an  unbroken  line  of  authority  to  that  effect: 

McClelland,  etc.,  v.  The  State,  138  Ind.  321  ; 
State,  etc.,  v.  Tappen,  29  Wis.  664; 
People  v.  Supervisor,  etc.,  16  Mich.  253; 
Bristol  v.  Johnson,  34  Mich.  123; 
Hoagland  v.  City  of  Sacramento,  52  Cal.  142; 
Lowell  v.  City  of  Boston,  111  Mass.  454; 
Thorndyke  v.  Inhabitants  of  Camden,  82  Me.  39 ; 
Cooley  on  Constitutional  Limitations,  pp.  332-341. 

On  the  other  side,  the  case  in  90  Ind.,  supra,  stands  practically 
alone.  The  premise  upon  which  the  decision  rests,  as  we  have 
shown,  is  a  mistaken  one.  It  consists  of  a  bare  statement  without 
a  word  of  reasoning  or  the  citation  of  a  single  authority  to  sup- 
port it. 

In  the  discussion  of  the  power  of  the  legislature  to  make  such 
an  appropriation  as  was  there  sought  to  be  made,  the  case  of 
Brooks  v.  Landsborough,  36  O.  St.  227,  is  cited,  but  the  citation 
is  somewhat  unfortunate,  in  that  the  Ohio  court,  in  its  decision, 
was  construing  a  law  entirely  different  in  principle  from  the  one 
before  the  Indiana  court.  In  the  Ohio  case  the  treasurer  of  a 
school  district  was  robbed.  He  was  unable  to  replace  the  money. 
The  legislature  passed  an  act  relieving  his  bondsmen  and  authoriz- 
ing the  district  officers  to  levy  a  tax  upon  the  property  of  the  dis- 
trict to  reimburse  him,  after  first  submitting  the  matter  to  the  vote 
of  the  electors  of  the  district  and  receiving  their  approval.  It  will 
be  observed  that  the  bondsmen  were  not  relieved  and  that  the  tax 
was  not  levied  by  the  act  of  the  Ohio  legislature.  It  only  provided 


2f>2 

;i  way  by  which  the  people  of  the  school  district  might  relieve  the 
bondsmen  and  Irvy  a  tax. 

Tli-'it  c;isc,  \ve  submit,  is  slight  authority  for  an  act  which  levies 
a  tax,  or  takes  funds  raised  from  a  tax  levy,  for  the  reimbursement 
of  public  officials  for  money  lost  by  them,  and  does  so  without  the 
consent  of  the  citizens  taxed. 

In  conclusion,  I  venture  to  express  the  hope  that  there  is  not  a 
member  of  the  General  Assembly  who  will  be  willing  to  sustain  this 
measure  and  the  kindred  measures  still  pending  before  the  Assem- 
bly, upon  a  careful  consideration  of  the  authorities  cited,  in  view 
of  the  public  policy  involved,  and  his  oath  to  support  the  Constitu- 
tion of  the  State. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL   No.   27. 


FEBRUARY  22,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  27,  for  the  relief  of  George 
W.  Willennar,  Treasurer  of  Steuben  County,  without  my  approval. 

The  bill  provides  for  the  reimbursement  of  said  treasurer  out 
of  the  public  funds  of  said  county  for  certain  moneys  paid  by  him 
to  said  county  on  account  of  county  funds  received  by  him  and 
deposited  in  a  certain  banking  institution,  which  moneys  were  lost 
to  him  through  failure  of  said  institution.  My  reasons  for  return- 
ing the  bill  without  my  signature  are : 

1st.     The  measure  is  against  public  policy. 

2d.     It  is  unconstitutional. 

I  have  more  fully  set  out  these  reasons  in  a  message  accompany- 
ing House  Bill  No.  39  this  day  returned  to  you  without  my  ap- 
proval. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


263 
HOUSE  BILL  No.  113. 


FEBRUARY  22,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  113  for  the  relief  of  George 
M.  Wilcox,  Samuel  L.  Luce,  John  Bill,  Joseph  Stewart  and 
Charles  M.  Blue,  ex-township  trustees  of  certain  townships  in  Jas- 
per County,  without  my  approval. 

The  bill  provides  for  the  reimbursement  of  certain  ex-trustees 
of  five  several  townships  of  Jasper  County,  out  of  the  public  funds 
of  said  several  townships,  for  certain  sums  of  money  respectively 
deposited  by  them  in  a  certain  banking  institution,  which  sums 
were  lost  to  them  through  the  failure  of  said  institution.  These 
sums  range  from  $673  in  one  instance  to  $2,929.14  in  another,  an 
amount  in  the  aggregate  of  $7,939.54.  The  reasons  for  returning 
the  bill  without  my  signature  are : 

1st.     The  measure  is  against  public  policy. 

2d.    It  is  unconstitutional. 

My  reasons  are  more  fully  set  forth  in  a  message  accompany- 
ing House  Bill  No.  39,  this  day  returned  to  you  without  my  ap- 
proval. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.   146. 


FEBRUARY  22,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  146  without  my  approval. 

The  title  of  the  bill  applies  to  cities  of  over  100,000  population, 
and  the  bill  is  evidently  intended  to  apply  to  the  city  of  Indian- 
apolis, that  being  the  only  city  in  the  State  of  over  100,000  pop- 
ulation. 

Section  1  of  the  act,  however,  applies  to  "cities  of  this  State 
having  a  population  of  100,000."  The  word  "over"  has  evidently 
been  omitted  from  this  section  by  mistake.  As  the  section  reads 
it  would  apply  only  to  cities  having  100,000  population.  There  is 
no  city  in  the  State  having  such  a  population. 

My  failure  to  approve  the  bill  is  based  wholly  upon  this  omis- 


264 

sion,  which,  in  my  judgment,  is  a  fatal  defect.     I  am  informed 
that  a  similar  bill  is  still  pending  before  the  General  Assembly,  and 
if  so,  this  error  can  be  corrected  and  the  pending  bill  passed. 
Respectfully  submitted, 

J.  FRANK  HANI/T, 

Governor. 

HOUSE  BILL  No.  208. 


FEBRUARY  27,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  208  without  my  approval. 

The  act  authorizes  the  Governor  to  issue  patents  for  certain 
Michigan  road  lands  in  this  State,  heretofore  sold  under  the  acts 
of  the  General  Assembly  and  the  purchase  price  of  which  has  been 
fully  paid,  and  for  which  no  patents  have  been  issued  heretofore 
by  the  State. 

The  purpose  of  the  measure  is  not  an  improper  one,  and  J. 
would  give  the  bill  my  approval  were  I  not  convinced  that  it  fails 
to  accomplish  the  purpose  intended.  There  is  an  irreconcilable 
conflict  between  the  provisions  of  the  bill. 

One  provision  requires  the  Governor  to  issue  a  patent,  under 
certain  conditions  named,  to  any  such  lands  "in  the  name  of  the 
original  purchaser,"  and  provides  that  when  the  patent  is  so  issued 
it  "shall  vest  in  such  purchaser  all  the  title  and  interest  held  by  the 
State  at  the  time  of  such  final  payment  for  the  land  so  purchased." 
And  this,  without  regard  as  to  whether  the  original  purchaser  is 
now  the  owner  of  the  lands  covered  by  the  patent. 

The  next  succeeding  sentence  provides  "that  upon  issuing  of 
such  patent  the  title  to  the  land  therein  described  shall  vest  in  said 
original  purchaser,  if  still  living  and  the  owner  of  such  lands,  or  if 
dead,  such  title  shall  vest  in  the  heirs,  devisees,  legatees  or  assignees 
of  such  original  purchaser." 

One  sentence  vests  the  title  in  the  original  purchaser  without  re- 
gard to  present  ownership.  The  other  vests  the  title  in  the  orig- 
inal purchaser  on  the  condition  that  he  is  still  the  owner.  The  two 
provisions  are  inconsistent.  Instead  of  removing  the  cloud  resting 
upon  the  title  to  any  such  lands  by  furnishing  a  missing  link  in  the 
chain  of  such  title,  which  I  have  no  doubt  was  the  purpose  of  the 
author  of  the  bill,  the  measure,  if  it  became  a  law,  would  cast  an 
additional  cloud  or  doubt  upon  such  title. 


_~  265 

If  the  intention  of  its  author  was  to  vest  the  title  of  the  State 
to  these  lands  in  the  present  owners  thereof,  the  bill  ought  to  so 
provide. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE   BILL   No.   92. 


MARCH  1,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  92  without  my  approval. 

The  bill  authorizes  and  directs  the  county  council  of  Spencer 
County  to  appropriate,  for  the  payment  of  the  unpaid  court  ex- 
penses of  the  Spencer  Circuit  Court  for  the  year  1903,  a  sum  of 
money  sufficient  to  cover  and  pay  such  unpaid  expenses,  not  ex- 
ceeding $250.00. 

There  is  nothing  in  the  bill  to  disclose  what  is  included  in  the 
words  "unpaid  court  expenses,"  an  appropriation  for  the  payment 
of  which  is  ordered.  I  have  been  informed,  however,  that  such  un- 
paid expenses  consist  of  fees  due  certain  citizens  of  said  county  for 
jury  services  rendered  in  said  court  during  said  year.  These  per- 
sons are,  it  is  said,  sixty-four  in  number,  and  their  unpaid  claims 
vary  in  amount  from  $2.00  to  $6.00  and  aggregate  $241.15 ;  that 
said  last  named  sum  is  in  excess  of  the  appropriation  made  by  said 
Spencer  County  county  council  for  court  expenses  for  said  year; 
that  the  excess  exists  because  of  the  fact  that  the  terms  of  said  court 
were  extended  by  an  act  of  the  General  Assembly  passed  after  the 
county  council  of  said  county  had  made  the  appropriation  for  court 
expenses  for  said  year ;  that  the  fact  that  such  appropriation  was 
exhausted  was  not  observed  by  the  judge  of  said  court,  nor  called 
to  his  attention  by  the  county  officials,  until  near  the  close  of  the 
November  term  of  said  court  for  said  year;  that  there  was  the 
utmost  good  faith  in  the  entire  transaction ;  that  the  services  were 
honestly  rendered,  the  money  honestly  earned  by  said  jurors,  and 
that  they  ought  to  be  paid.  It  is  also  said  that  the  county  council 
of  said  county  has  refused  to  make  an  appropriation  for  the  pay- 
ment of  such  fees,  and  that  they  remain  unpaid  because  of  said 
failure  to  make  such  appropriation. 

The  bill  is  local  and  special.  It  applies  only  to  Spencer  County, 
which  is  referred  to  bv  name.  It  is  clearlv  within  the  constitutional 


266 

inhibition  contained  in  Section  22  of  Article  4  of  the  Constitution 
of  the  State,  which  provides : 

"The  General  Assembly  shall  not  pass  local  or  special  laws  in  any  of  I  he 
following  enumerated  eases,  that  is  to  say:  Regulating  county  and 

township  business." 

The  term  "county  and  township  business"  has  been  defined  by 
the  Supreme  Court  as  follows : 

"The  term  'business,'  when  applied  to  a  public  corporation,  signifies  the 
conduct  of  the   usual   affairs   of   the  corporation,   and    the   conduct   of   such 
affairs  as  commonly  engage  the  attention  of  county  and  township  officers." 
Mount,  Trustee,  v.  The  State,  ex  rel.  Richey,  90  Ind.  31. 

I  have  had  occasion  heretofore  to  criticise  the  decision  ren- 
dered in  the  above  case,  in  so  far  as  it  held  constitutional  legislative 
acts  for  the  reimbursement  of  public  officers  on  account  of  public 
funds  lost  by  them.  I  am,  however,  in  accord  with  the  definition 
given  in  the  opinion  in  said  case  upon  the  question  now  under  con- 
sideration. The  correctness  of  such  definition  has  since  been  recog- 
nized by  the  Supreme  Court  and  has  never,  to  my  knowledge,  re- 
ceived judicial  criticism. 

In  a  later  opinion  it  is  said,  with  reference  to  the  above  defini- 
tion: 

"This  statement  of  the  law  is,  we  think,  correct  and  especially  applicable 
to  the  case  now  before  us,  *  *  *." 

Mode  v.  Beasley,  143  Ind.  316. 

In  this  case  it  is  held  that  the  seventeen  inhibitions  contained  in 
Section  22  of  Article  4  of  the  Constitution  are  absolute,  and  that 
the.  Legislature  has  no  discretion  or  right  of  judgment  relative  to 
the  subjects  therein  named.  The  court  said: 

"One  of  the  seventeen  subjects  embraced  in  that  section,  and  thereby 
put  beyond  the  power  of  the  Legislature  to  pass  a  local  law  upon  it,  is  the 
subject  of  'regulating  county  and  township  business.'" 

The  provisions  of  the  bill  under  consideration  bring  it  clearly 
within  the  above  definition  of  "county  and  township  business." 

If  "county  and  township  business,"  as  used  in  the  Constitution, 
signifies  the  conduct  of  the -usual  affairs  of  the  corporation,  and  the 
conduct  of  such  affairs  as  commonly  engage  the  attention  of  county 
and  township  officers  it  certainly  includes  the  act  of  making  an  ap- 
propriation by  the  county  council  for  the  payment  of  the  expenses 
of  the  circuit  court  of  the  county.  It  also  includes  the  allowance 
for  jury  fees  by  said  court,  and  their  payment  upon  the  warrant 
of  the  auditor  by  the  treasurer  of  the  county.  These  duties, — 


267 

making  such  appropriation,  allowing  such  fees  and  paying  such 
jurors,  are  clearly  devolved  by  the  law  upon  the  members  of  the 
county  council,  the  judge  of  the  court,  and  the  auditor  and  the 
treasurer,  all  of  whom  are  officers,  who,  when  so  acting,  are  en- 
gaged in  the  conduct  of  the  usual  affairs  of  the  county. 

It  may  be  conceded  that  the  claims  of  the  several  persons  in- 
cluded in  the  appropriation  ordered  to  be  made  by  the  terms  of  the 
bill,  arc  just  and  that  they  ought  to  be  paid.  But  the  fact  re- 
mains that  the  General  Assembly  has  no  power  to  authorize  their 
payment.  If  the  claims  are  just,  it  is  the  duty  of  the  county  coun- 
cil to  make  an  appropriation  for  their  payment.  That  duty  is 
devolved  upon  them  by  the  law.  They  have  full  authority  to  act. 
The  appeal  that  justice  be  done  these  claimants  should  be  made  to 
such  council  and  not  to  the  Legislature. 

The  claim  provided  for  in  the  bill  is  little,  it  is  true,  but  if  the 
bill  were  to  become  a  law  it  would  establish  a  bad  precedent,  and  a 
bad  precedent  based  upon  a  little  claim  is  as  dangerous  as  if  it 
were  based  upon  a  large  one.  If  this  bill  were  to  become  a  law,  it 
would  in  a  few  years  become  quite  the  custom  on  the  part  of  those 
having  claims  against  counties,  which  the  county  councils  of  such 
counties  have  refused  to  recognize,  to  come  to  the  General  Assem- 
bly for  relief,  and  secure  the  passage  of  measures  ordering  and  di- 
recting such  councils  to  make  appropriations  for  the  payment  of 
such  claims.  Such  legislation  is  against  public  policy,  is  clearly  un- 
constitutional, and  cannot  receive  my  approval. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  306. 


MARCH  2,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives : 
I  return  herewith  House  Bill  No.  306  without  my  approval. 
The  act  creates  and  defines  the  crime  of  child  desertion  and 
provides  punishment  therefor.     I  am  in  full  symapthy  with  the 
principal  object  of  the  bill,  and  regret  that  I  am  not  able  to  give 
it,  my  approval  in  its  present  form. 

The  title  of  the  bill  is,  I  think,  clearly  insufficient.  It  reads 
as  follows :  "An  act  concerning  child  desertion."  It  is  impossible 
to  tell  from  this  title  that  the  bill  is  penal  in  character,  that  it  de- 


268 

fines  a  mine,  or  provides  punishment  for  the  commission  of  the 
net  inhibited. 

The  bill  provides : 

"That  the  father,  or,  when  charged  by  law  for  the  maintenance  thereof, 
the  mother,  of  a  legitimate  child  or  an  illegitimate  child  or  children  under 
sixteen  years  of  age  living  in  this  State,  who,  being  able,  either  by  reason 
of  having  means  or  by  means  of  having  capacity  to  earn  wages  by  personal 
services  or  labor,  to  provide  such  child  or  children  with  proper  and  necessary 
home,  care,  food  and  clothing,  shall  neglect  or  refuse  so  to  do,  *  *  *  shall 
be  deemed  guilty  of  child  desertion." 

It  also  provides  that  any  such  father  or  mother,  their 
"said  child  or  children  being  legally  an  inmate  or  inmates  of  a  county  or 
other  children's  home,  who  shall  neglect  or  refuse  to  pay  the  trustees  of  such 
children's  home  the  reasonable  cost  of  keeping  such  child  or  children  in  said 
home,  shall  be  deemed  guilty  of  child  desertion  and  on  conviction  shall  be 
imprisoned  in  a  state  prison  not  less  than  one  year  nor  more  than  three  years." 

The  last  clause  just  quoted  in  effect  provides  for  imprisonment 
for  debt.  It  creates  a  civil  liability, — an  obligation  upon  the  part 
of  such  father  or  mother  to  pay  money, — and  provides  imprison- 
ment for  failure  to  meet  such  obligation. 

Section  22  of  the  Bill  of  Rights  provides : 

"There  shall  be  no  imprisonment  for  debt,  except  in  case  of  fraud." 

The  clause  under  consideration  is  therefore  invalid.  So,  also, 
is  Section  3,  the  same  being  based  upon  the  offense  created  in  the 
clause  just  considered. 

There  ought  to  be  a  statute  defining  child  desertion,  making  the 
same  a  crime,  and  providing  for  the  punishment  of  persons  found 
guilty  of  such  offense.  That  portion  of  the  first  section  of  the  act, 
which  provides  that  failure  on  the  part  of  the  parent  who  is  able, 
cither  by  reason  of  having  means  or  by  reason  of  having  capacity 
to  earn  wages  by  personal  services  or  labor,  to  provide  for  the 
necessary  and  proper  home,  care,  food  and  clothing  of  his  child, 
and  makes  the  neglect  or  refusal  of  such  parent  so  to  do  an  offense 
punishable  by  imprisonment,  is,  I  have  no  doubt,  a  valid  exercise 
of  legislative  authority,  and  I  would  be  glad  to  give  approval  to 
such  a  measure. 

I  therefore  suggest  that  the  bill  be  rewritten,  that  the  clause 
and   the   section   thereof  within   the   constitutional   inhibition,   be 
eliminated  therefrom,  that  the  title  thereto  be  rewritten  and  made 
sufficient,  and  that  such  bill  be  then  reintroduced  and  passed. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


269 
HOUSE  BILL  No.  149. 


MARCH  4,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  bill  No.  149  without  my  approval. 

The  bill  seeks  to  preserve  the  fresh  water  lakes  of  the  State 
of  Indiana  at  their  established  level  and  protect  them  from  being 
injuriously  affected  or  destroyed  by  the  lowering  of  the  water  level 
thereof. 

In  the  main  the  bill  has  my  approval.  It  has  some  provisions, 
however,  which  are  so  clearly  within  the  inhibitions  of  the  Con- 
stitution as  to  render  it  invalid. 

Certain  provisions  of  the  bill  contemplate  that  drains  may 
hereafter  be  established  within  forty  rods  of  fresh  water  lakes,  in 
accordance  with  the  present  drainage  laws. 

Section  6  provides  that  the  State  Board  of  Health,  if  it  deter- 
mines that  the  water  level  in  a  lake  has  fallen  below  the  high  water 
mark  as  established  by  the  act,  and  has  consequently  affected  the 
public  health,  may  enter  an  order  requiring  the  drains  within  forty 
rods  of  the  lake  affected  to  be  filled,  and  file  a  copy  of  this  order 
with  the  clerk  of  the  court  in  the  county  where  such  lake  is  situate, 
whereupon  notice  shall  be  given  to  the  parties  interested,  by  pub- 
lication, and  any  person  interested  or  aggrieved  by  the  action  of 
said  board  in  ordering  the  filling  up  of  such  portion  of  said  ditch 
as  lies  more  than  forty  rods  and  less  than  eighty  rods  from  the 
meander  or  marginal  line  of  said  lake,  may  appeal  to  the  circuit 
court  of  said  county  and  that  thereupon  a  hearing  shall  be  had 
before  such  court  upon  the  single  issue,  as  to  whether  the  level  of 
water  in  such  lake  is  not  threatened  or  impaired  by  the  escape  of 
waters  into  such  ditch.  The  ditch  ordered  filled  may  have  been 
constructed  under  the  public  drainage  laws  and  the  cost  of  its  con- 
struction met  by  assessments  upon  property  benefited  thereby  and- 
may  have  resulted  in  the  reclamation  of  lands  above  the  point  in 
said  ditch  ordered  to  be  filled. 

In  every  such  case  the  filling  of  such  ditch  would  destroy  an 
improvement  in  which  each  of  said  land  owners  would  have  a 
vested  right, — a  property  interest.  It  might  also  destroy  valuable 
lands  reclaimed  by  such  improvement  and  cause  them  to  become 
waste  or  overflowed.  This  would  result  in  the  destruction  of  prop- 
erty rights  that  are  clearly  within  the  constitutional  inhibition 
found  in  Section  31  of  the  bill  of  rights  which  provides  that  no 
man's  property  shall  be  taken  by  law  without  just  compensation. 


270 

There  is  no  provision  in  the  act  for  the  assessment  of  any  com- 
pensation or  damages  on  account  of  the  destruction  and  the  taking 
of  the  property.  In  effect  this  section  of  the  measure  under  con- 
sideration takes  the  property  of  the  citizen  without  any  provision 
whereby  his  damages  and  injuries  may  be  asssessed.  It  is  so 
clearly  invalid  as  to  require  neither  argument  or  citation  of  au- 
thority beyond  the  Constitution  itself. 

I  am  informed  that  the  subject  of  the  protection  of  the  fresh 
water  lakes  of  the  State  is  fully  covered  by  the  provisions  of  the 
general  drainage  act  which  has  been  pending  in  the  General  As- 
sembly and  which  I  understand  has  passed  and  is  now  being  en- 
rolled for  transmission  to  the  Executive.  If  so,  no  substantial  in- 
jury will  follow  the  failure  of  the  present  measure  to  become  a 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  186. 


MARCH  4,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 
I  return  herewith  House  Bill  No.  186  without  my  approval. 
The  bill,  in  special  terms,  declares  that  all  sales  or  transfers  in 
bulk  of  the  whole  or  any  part  of  a  stock  of  merchandise,  otherwise 
than  in  the  ordinary  course  of  trade  and  in  the  usual  course  of 
the  seller's  business,  shall  be  void  as  against  the  creditors  of  the 
seller,  unless,  at  least  five  days  before  such  sale  or  transfer,  the 
purchaser  shall  demand  and  receive  from  such  seller  a  full  detailed 
inventory,  showing  the  quantity  and  so  far  as  possible,  with  the 
exercise  of  reasonable  diligence,  the  fair  wholesale  value  of  each 
article  to  be  included  in  such  sale  or  transfer,  and  unless  the  pur- 
chaser shall  further  demand  and  receive  from  the  seller  a  written 
statement,  under  oath,  of  the  names  and  addresses  of*  all  creditors 
of  the  seller,  with  the  amount  of  indebtedness  owing  to  each,  or,  if 
there  be  no  creditor,  a  written  statement  to  that  effect,  and  unless 
the  purchaser  or  seller  shall,  at  least  five  days  before  the  taking 
possession  of  the  merchandise  and  articles  included  in  such  sale  or 
transfer,  notify  personally,  or  by  telegram,  or  by  registered  mail, 
every  creditor  whose  name  and  address  is  included  in  said  statement 
of  the  propased  purchase,  sale  or  transfer. 

The  purpose  of  the  bill,  no  doubt,  is  to  prevent  fraudulent  sales 


271 

by  merchants  and  to  secure  the  equal  distribution  of  the  property 
of  insolvent  merchants, — a  purpose  which  I  concede  is  a  proper  and 
legitimate  one.  But  it  is  not  confined  to  insolvent  persons.  Unfor- 
tunately, it  is  so  framed  as  to  include  all  merchants  who  may  be 
in  any  manner  indebted  to  any  one.  It  is  not  directed  at  fraudu- 
lent sellers  or  at  sales  by  insolvent  merchants.  There  is  no  ques- 
tion but  what  the  Legislature  has  ample  power  to  declare  fraudu- 
lent sales  void,  and  to  pass  proper  enactments  for  the  just  distri- 
bution of  the  property  of  insolvents.  But  it  is  equally  clear  that 
it  possesses  no  power,  under  the  Constitution,  to  declare  fraudu- 
lent and  void  a  transaction  that  is  not  as  a  matter  of  fact  tainted 
with  fraud.  It  is  not  within  the  power  of  the  Legislature,  by  the 
use  of  an  epithet,  to  change  an  innocent  transaction  into  a  vicious 
one ;  nor  can  it  destroy  the  rights  of  solvent  debtors  in  endeavors 
to  equitably  distribute  the  assets  of  insolvents.  There  must  be 
some  public  reason  existing  to  justify  the  invasion  by  the  Legisla- 
ture of  the  inalienable  and  ancient  rights  of  the  citizens.  No  public 
reason  can  be  offered  why  an  honest  and  solvent  merchant  shall  be 
trammeled  and  restricted  in  his  power  to  sell  and  dispose  of  his 
goods  simply  because  he  may  be  indebted  to  some  extent. 
In  a  recent  and  w ell-considered  Ohio  case  it  is  said : 

"While  it  is  not  required  that  every  act  which  restricts  the  enjoyment  of 
property  must  affect  every  member  of  society,  it  is  required  that  every 
such  act  must  be  founded  upon  a  reason  of  public  nature,  and  the  act  must 
affect  all  who  are  within  the  reason  of  its  enactment.  *  *  *. 

"For  every  restriction  upon  the  enjoyment  and  use  of  property  there 
must  be  some  substantial  reason  of  a  public  character.  *  *  *.  If  a  restric- 
tion is  placed  upon  the  alienation  of  property,  it  must  be  for  the  benefit  of 
either  the  entire  body  of  the  people,  or  at  least  of  all  who  are  within  the 
reason  of  the  restriction." 

Glos  v.  Mulchay,  71  N.  E.  630. 

In  another  very  recent  decision,  remarkable  for  the  force,  ac- 
curacy and  cogency  of  its  reasoning,  for  the  care  with  which  it  was 
considered  and  the  learning  and  research  it  displays,  it  is  said  of 
an  act  similar  to  the  one  here  under  consideration,  in  speaking  of 
the  police  power  of  the  State,  under  the  authority  of  which  the  va- 
lidity of  the  act  was  sought  to  be  maintained : 

"The  power  may  be  exercised  to  promote  the  safety,  health,  comfort  and 
welfare  of  society,  and  to  sustain  legislation  as  a  proper  exercise  of  the 
police  power  it  must  have  reference  to  some  such  end.  *  *. 

"The  enactment  in  controversy  does  not  appear  to  have  reference  to 
either  of  the  objects  here  indicated.  It  can  hardly  be  said  that  a  law  which 
prevents  a  person,  though  indebted,  who  is  substantially  able  to  pay  his 


272 

debts,  from  selling  his  property  in  the  same  way  his  neighbors  do,  and  in 
accordance  with  the  time-honored  custom  or  usage,  either  promotes  the  safety, 
health,  comfort  or  welfare  of  the  community  or  the  State. 

"If  the  act  referred  generally  to  insolvent  debtors  it  would  present  a 
different  question,  but  it  relates  simply  to  debtors  and  creditors  of  debtors 
of  a  particular  and  specified  business  whether  solvent  or  insolvent;  so  that 
the  merchant  who  is  worth  a  fortune  over  and  above  his  indebtedness,  and  who 
is  able  to  respond  instantly  to  his  creditors,  who  may  be  only  such  because  of 
convenience  in  trade  and  business  transactions,  nevertheless  finds  himself, 
under  the  provisions  of  this  act,  deprived  of  the  liberty  to  sell  his  goods,  or 
to  contract  in  relation  thereto  in  the  same  manner  that  others  engaged  in 
the  same  business  may  lawfully  do." 

Sol  Block  &  Gieff  v.  Schwarts,  27  Utah,  402. 

In  a  dissenting  opinion  filed  in  a  Tennessee  case  hereinafter  re- 
ferred to,  the  reasoning  of  which  is  much  stronger  than  that  of 
the  principal  opinion,  it  is  said  of  a  similar  statute : 

"No  good  reason  can  be  given  why  merchants  should  be  trammeled  and 
restricted  in  the  sale  of  their  goods,  when  farmers,  traders,  manufacturers 
and  other  dealers  have  the  unrestricted  right  to  sell  when  they  please,  pro- 
vided it  is  done  in  good  faith. 

"Nor  is  there  any  good  reason  why  such  a  sale  should,  in  the  case  of  a 
merchant,  be  presumed  to  be  fraudulent,  when  in  the  case  of  other  dealers 
the  presumption  is  in  favor  of  good  faith,  and  proof  is  required  to  show 
fraud.  Nor  is  there  any  good  reason  to  restrict  the  merchant  who  is  solvent 
from  making  sale  of  his  goods,  as  he  may  deem  advisable,  in  order  to  prevent 
the  insolvent  merchant  from  exercising  the  same  option  and  privilege." 
Neas  v.  Borches,  109  Tenn.  405. 

In  an  able  and  well-considered  case  decided  by  our  own  Su- 
preme Court,  the  following  quotation  from  Judge  Cooley  on  Con- 
stitutional Limitations  is  cited  with  approval : 

"The  doubt  might  also  arise  whether  a  regulation  made  for  any  one  class  of 
citizens,  entirely  arbitrary  in  its  character,  and  restricting  their  rights,  privi- 
leges or  legal  capacity  in  a  manner  before  unknown  to  the  law,  could  be  sus- 
tained, notwithstanding  its  generality.  Distinctions  in  these  respects  must 
rest  upon  some  reason  upon  which  they  can  be  defended, — like  the  one  of 
incapacity  in  infants  and  insane  persons;  and  if  the  Legislature  should  under- 
take to  provide  that  persons  following  some  specified  lawful  trade  or  employ- 
ment should  not  have  capacity  to  make  contracts,  or  to  receive  conveyances, 
or  to  build  such  houses  as  others  were  allowed  to  erect,  or  in  any  other  way 
to  make  such  use  of  their  property  as  was  permissible  to  others,  it  can 
scarcely  be  doubted  that  the  act  would  transcend  the  due  bounds  of  legisla- 
tive power  even  if  no  express  constitutional  provision  could  be  pointed  out 
with  which  it  would  come  in  conflict.  To  forbid  to  an  individual  or  a  class 
the  right  to  the  acquisition  or  enjoyment  of  property  in  such  manner  as 
should  be  permitted  to  the  community  at  large,  would  be  to  deprive  them  of 
liberty  in  particulars  of  primary,  importance  to  their  pursuit  of  happiness, 
and  those  who  should  claim  a  right  to  do  so  ought  to  be  able  to  show  a 


273 

specific  authority  therefor,  instead  of  calling  upon  others   to   show  how  and 
where  the  authorities  negatived." 

The  bill  under  consideration  clearly  applies,  and  is  intended  to 
apply  solely  to  those  engaged  in  the  sale  of  merchandise  and  has 
no  application  to  any  other  class  of  citizens.  It  would  have  no  ap- 
plication even  to  one  whose  business  was  to  buy,  sell  and  exchange 
stocks  of  merchandise  in  bulk,  because  this  would  be  a  sale  in  the 
ordinary  course  of  such  person's  business.  It  can  apply  only  to 
those  engaged  in  mercantile  business, — merchants. 

The  merchant  engaged  in  the  regular  mercantile  trade,  either 
at  wholesale  or  at  retail,  if  he  be  indebted,  though  perfectly  solvent 
and  entirely  honest,  if  he  meets  with  an  opportunity  to  sell  his 
stock  of  goods,  before  he  can  effect  such  sale  and  give  to  the  pur- 
chaser a  clear  and  perfect  title  to  the  property  which  is  the  subject 
of  the  sale,  must  comply  with  all  the  regulations  of  this  bill,  some  of 
which  are  onerous  and  all  but  prohibitive,  while  those  engaged  in 
other  lines  of  business,  although  they  may  be  indebted,  are  bound 
by  no  such  conditions.  Their  hands  are  free.  They  can  dispose  of 
their  property  without  notice  to  any  one  and  without  requiring  of 
the  purchaser  anything  except  the  payment  of  the  consideration 
agreed  upon.  The  merchant  who  happens  to  be  in  debt,  must,  after 
finding  a  probable  buyer,  wait  at  least  five  days  and  give  notice  to 
his  creditors.  He  must  require  his  purchaser  to  take  an  inventory 
of  his  entire  stock,  whether  that  is  desirable  or  not;  he  must  fur- 
nish such  purchaser  with  a  list  of  his  creditors,  their  addresses  and 
his  indebtedness  to  each ;  his  purchaser  or  himself  must  give  notice 
to  his  creditors  not  only  of  the  fact  of  the  anticipated  sale,  but  all 
its  terms  and  conditions ;  and  such  purchaser  finds  his  contract  of 
purchase  invalid  if  the  list  of  creditors  be  incomplete,  however 
honest  the  mistake  therein ;  while  the  trader,  the  mechanic,  the 
farmer,  the  professional  man,  the  banker  or  the  baker,  whether  he 
be  in  debt  or  not,  without  consulting  any  one  but  the  buyer,  and 
the  merchant  who  is  not  in  debt,  may  sell  at  will. 

By  confining  the  prohibitory  terms  of  the  statute  to  merchants 
and  exempting  all  other  persons,  natural  and  artificial,  from  their 
operation ;  by  declaring  void  the  agreements  of  the  merchant  and 
leaving  the  same  kind  of  contracts  valid  as  to  others ;  by  imposing 
conditions  on  one  class  of  citizens  in  their  right  to  dispose  of  their 
property,  while  there  is  a  total  immunity  from  such  restrictions  as 
to  all  other  classes,  an  unreasonable,  unwarranted  and  unconsti- 
tutional classification  of  citizens  is  made. 

[lg— 19891] 


274 

In  the  light  of  what  has  already  been  said  it  is  apparent  that 
the  provisions  of  the  bill  are  obnoxious  to  those  provisions  of  the 
State  Constitution  and  of  the  Constitution  of  the  United  States 
which  are  designed  to  insure  to  the  citizen  the  right  to  life,  liberty, 
property  and  equality  before  the  law  and  with  which  the  theory 
of  our  government  presumes  all  men  to  be  endowed  by  nature. 

Article  5  of  the  amendments  to  the  Federal  Constitution  pro- 
vides, among  other  things,  that  no  citizen  shall  be  deprived  of  life, 
liberty  or  property  without  due  process  of  law. 

Article  14  provides,  among  other  things: 

"No  State  shall  make  or  enforce  any  law  which  skall  abridge  the  privi- 
leges or  immunities  of  citizens  of  the  United  States;  nor  shall  any  State 
deprive  any  person  of  life,  liberty  or  property  without  due  process  of  law, 
or  deny  to  any  person  within  its  jurisdiction  the  equal  protection  of  the  laws." 

Section  21  of  Article  1  of  the  State  Constitution  provides  that 
no  man's  property  shall  be  taken  by  law  without  just  compensation. 

Section  23  provides  that  the  General  Assembly  shall  not  grant 
to  any  citizen  or  class  of  citizens  privileges  or  immunities  which 
upon  the  same  terms  shall  not  equally  belong  to  all  citizens. 

These  constitutional  provisions  are  the  supreme  law  of  the  State 
upon  this  subject.  To  that  law  all  must  yield  obedience, — the  ex- 
ecutive, the  legislative,  and  the  judicial  departments  of  the  govern- 
ment, as  well  as  every  citizen  from  the  highest  to  the  lowest.  In 
them  liberty  dwells  and  freedom  has  her  habitation.  They  repre- 
sent the  essence  of  free  government  as  established  by  our  fathers 
and  given  to  us  in  trust  for  our  children.  They  constitute  the  law 
of  the  land,  aye  of  the  Indiana  land,  and  as  such  they  are  sacred. 
Under  their  mandate  no  person  can  be  deprived  of  life,  liberty  or 
property  without  due  process  of  law.  Under  them  every  person  is 
entitled  to  the  equal  protection  of  the  law.  Under  them  every  one 
may  acquire  property,  possess  and  protect  it,  as  well  as  defend  his 
life  and  liberty.  Under  them  all  these  rights  are  the  guaranteed, 
inherent  and  inalienable  heritage  of  every  citizen.  And  under  them 
an  enactment  which  deprives  the  citizen  0f  his  property  or  of  any 
of  the  essential  attributes  of  its  ownership,  or  of  any  part  of  his 
personal  liberty,  is  just  as  much  inhibited  as  one  which  would  de- 
prive him  of  life. 

Equality  before  the  law  is  the  cornerstone  of  the  whole  national 
fabric,  and  these  provisions  of  the  Constitution  of  Indiana  are,  as 
we  have  seen,  but  the  reiteration  of  tke  provisions  of  the  National 
Constitution.  They  require  that  all  citizens  in  like  conditions  and 


275 

circumstances  shall  stand  upon  equality  of  right  and  privilege  un- 
der the  law. 

One  of  the  inherent  rights  of  the  citizen  intended  to  be  pro- 
tected by  these  provisions  of  the  Constitution  of  the  State  and  Na- 
tion from  encroachment  by  legislative  enactment,  as  has  been  al- 
ready suggested,  is  that  of  the  acquisition,  free  use  and  enjoyment 
and  the  disposition  of  property.  That  this  is  true  has  been  af- 
firmed by  our  own  Supreme  Court  on  all  occasions  where  the  ques- 
tion has  in  any  wise  been  presented. 

Quoting  from  Judge  Cooley,  our  Supreme  Court  has  said  in 
the  case  of  Dixon  v.  Poe,  159  Ind.  497: 

"To  forbid  an  individual  or  a  class  the  right  to  the  acquisition  or  en- 
joyment of  property  in  such  manner  as  is  permitted  to  the  community  at 
large,  would  be  to  deprive  them  of  liberty  in  particulars  of  primary  importance 
to  their  pursuit  of  happiness." 

One  of  the  chief  and  most  valuable  attributes  of  the  ownership 
of  property,  is  the  right  to  dispose  of  it,  and  to  take  from  the 
citizen  this  right,  or  to  so  trammel  and  hamper  it  as  to  substantially 
impair  its  use,  is  to  take  from  the  citizen  his  property  as  much  as 
if  it  took  from  him  the  thing  itself. 

It  has  been  well  said : 

"To  take  from  property  its  chief  element  of  value,  and  to  deny  to  the 

citizen  the  right  to  use  and  transfer  it  in  any  proper  and  legitimate  manner, 

is  as  much  depriving  him  of  his  property  as  if  the  property  itself  were  taken." 

Third  National  Bank  v.  Devine  Grocery  Co.,  97  Tenn.  611,   (37  S.  W. 

390). 

The  effect  of  the  measure  under  consideration  is  to  restrict  and 
burden  the  merchant's  property  in  such  a  manner  as  to  prevent 
its  free  transfer  and  a  realization  of  its  full  value.  It  takes  away 
one  of  the  chief  elements  of  its  value,  to  wit,  the  right  to  use  and 
legitimately  dispose  of  it. 

Speaking  upon  this  question  the  Supreme  Court  of  Utah,  in 
the  case  already  referred  to  herein,  used  this  language : 

"Property  has  some  essential  attributes  without  which  we  could  not  con- 
ceive it  to  be  property.  Among  these  are  use,  the  enjoyment,  susceptibility  of 
purchase,  sale,  and  of  contracts  in  relation  thereto.  The  taking  away  of  one 
of  the  essential  attributes  may  violate  the  constitutional  guarantee  that  no 
person  shall  be  deprived  of  his  property  without  due  process  of  law  as 
clearly  as  in  the  case  of  physical  taking  without  due  process  of  law.  An 
enactment,  therefore,  like  the  one  in  controversy,  which  deprives  an  owner 
of  his  liberty  to  sell  his  property,  or  contract  in  relation  thereto,,  in  the  same 
manner  as  others  engaged  in  the  same  business  might  lawfully  do,  invades  his 


276 

rights  guaranteed  by  the  Constitution  and  cannot  be  upheld;  and  to  prevent 
the  free  exchange,  sale  or  disposition  of  property  according  to  the  im- 
memorial usages  of  trade  is  to  deprive  it  of  one  of  its  main  attributes." 

Our  own  Supreme  Court  has  so  clearly  stated  the  law  as  applied 
to  this  class  of  legislation  as  to  leave  no  room  for  doubt  as  to  what 
the  law  is  upon  the  subject  in  the  State  of  Indiana. 

In  the  case  of  Dixon  v.  Poe,  supra,  from  which  I  have  already 
quoted,  the  court  holds  an  act  void  as  obnoxious  to  the  above  pro- 
visions of  the  Constitution  of  the  United  States  and  of  this  State 
because  the  act  imposed  conditions  upon  a  merchant  in  the  redemp- 
tion of  his  checks  that  were  not  imposed  upon  citizens  engaged  in 
other  callings.  And  in  the  case  of  McKinster  v.  Sager,  decided  by 
our  Supreme  Court  on  the  29th  day  of  December,  1904,  and  re- 
ported in  vol.  72,  page  51,  of  the  N.  E.  Reporter,  where  a  statute 
enacted  upon  the  same  subject  and  very  similar  in  terms,  was  un- 
der consideration,  the  court  held  that  the  law  was  unconstitutional 
because  of  the  unreasonable  classification  therein  as  to  the  remedy 
afforded  the  creditors  of  the  debtor.  The  argument  of  the  court 
and  the  reasons  upon  which  the  case  was  decided  apply  with  equal 
force  to  the  bill  now  under  consideration.  It  is  there  said,  quoting 
from  an  opinion  in  the  20  Mich.  452 : 

"But  the  discrimination  by  the  State  between  different  classes  of  occu- 
pations, and  the  favoring  of  one  at  the  expense  of  the  rest,  whether  that  one 
be  farming  or  banking,  merchandising  or  milling,  printing  or  railroading,  is 
not  legitimate  legislation,  and  is  an  invasion  of  that  equality  of  right  and 
privilege  which  is  a  maxim  in  state  government.  When  the  door  is  once  opened 
to  it  there  is  no  line  at  which  we  can  stop  and  say  with  confidence  that  thus 
far  we  may  go  with  safety  and  propriety,  but  no  further.  Every  honest 
employment  is  honorable.  It  is  beneficial  to  the  public.  It  deserves  en- 
couragement. The  more  successful  we  can  make  it,  the  more  does  it  generally 
subserve  the  public  good.  But  it  is  not  the  business  of  the  State  to  make 
discriminations  in  favor  of  one  class  against  another,  or  in  favor  of  one 
employment  against  another.  The  State  can  have  no  favorites.  Its  business 
is  to  protect  the  industry  of  all  and  to  give  all  the  benefit  of  equal  laws." 

These  expressions  of  pur  own  court  of  last  resort  leave  it  clear 
to  my  mind  what  would  be  the  fate  of  this  measure  were  it  to  receive 
executive  sanction. 

I  am  not  unmindful  of  the  fact  that  in  the  State  of  Massachu- 
setts a  measure  somewhat  similar  in  terms  to  the  one  under  consid- 
eration has  received  the  doubting  approval  of  the  Supreme  Court 
of  that  State,  nor  that  a  similar  measure  has  been  upheld  in  the 
State  of  Washington  and  in  the  State  of  Tennessee.  The  Tennes- 
see statute  was  upheld  by  a  divided  opinion  of  the  Supreme  Court 


277 

of  that  State.  An  able  dissenting  opinion  was  delivered  by  one  of 
the  members  of  the  court,  in  which  the  line  of  argument  pursued 
was  precisely  the  same  as  that  followed  by  our  own  Supreme  Court. 
If  the  case  as  to  this  measure  stood  upon  the  Tennessee  decision 
alone,  I  would  feel  myself  irresistibly  impelled  to  follow  the  reason- 
ing of  the  dissenting  opinion. 

The  same  question  that  is  presented  here  was  presented  to  the 
Supreme  Court  of  the  State  of  Ohio,  also  to  the  Supreme  Court 
of  the  State  of  Utah.  In  each  case  a  very  able  and  exhaustive 
opinion  was  delivered  by  Shauck,  judge,  speaking  for  the  Supreme 
Court  of  the  State  of  Ohio,  and  by  Bartch,  judge,  speaking  for  the 
Supreme  Court  of  the  State  of  Utah,  in  which  these  laws  were  held 
unconstitutional.  In  the  Ohio  case  it  is  said : 

"Applying  the  familiar  and  unquestioned  rule  that  the  validity  of  an  act 
is  to  be  determined  by  its  operations,  and  not  by  its  title  or  declared  purpose, 
this  act,  under  the  guise  of  preventing  fraud  in  such  sales,  prohibits  them 
altogether,  and  thus  places  upon  the  enjoyment  of  property  an  important 
restriction  which  no  public  interest  requires,  and  which  the  Constitution, 
therefore,  forbids.  One  who  challenges  the  soundness  of  this  conclusion 
should  be  prepared  to  maintain  the  validity  of  an  act  expressly  forbidding 
sales  of  stocks  of  merchandise  in  bulk.  By  the  act  the  Legislature  has 
attempted  to  discriminate  unwarrantably  among  creditors  and  debtors.  *  *  *. 

"Although  the  act  applies  to  all  the  creditors  of  the  seller,  it  applies  to 
those  only  who  are  creditors  of  the  owner  of  a  stock  of  merchandise,  and 
thus  an  unreasonable  burden  is  imposed  upon  a  limited  class  of  debtors  for 
the  supposed  benefit  of  a  limited  class  who  are  their  creditors." 

In  the  Utah  case  it  is  said: 

"While  it  is  within  the  province  of  the  Legislature  to  prevent  fraudulent 
sales  as  a  protection  to  creditors,  still,  when  it  attempts  to  do  this,— to 
remove  one  evil, — it  must  not  so  restrict  individual  rights  and  disturb  in- 
dustrial pursuits  and  usages  as  to  cause  a  score  of  wrongs. 

"We  are  of  the  opinion  that  the  enactment  in  controversy  abridges  some 
of  the  inalienable  rights  of  persons  guaranteed  by  the  Constitution;  that  it 
is  not  a  proper  exercise  of  the  police  power  of  the  State;  that  it  deprives 
property  of  one  of  its  chief  attributes,  and  some  persons  the  liberty  to  dis- 
pose of  property  as  others  may;  *%  *;  that  it  deprives  the  person  to 
whom  it  applies  of  a  right  of  property  without  due  process  of  law;  and  that, 
therefore,  it  is  null  and  void." 

As  we  have  seen,  the  views  of  the  several  courts  as  expressed  in 
these  cases  are  so  clearly  sustained  by  the  general  principles  of  law, 
and  are  so  much  in  harmony  with  the  decisions  of  our  own  Supreme 
Court,  as  to  convince  me  that  whatever  the  law  may  be  held  to  be 
in  the  States  of  Massachusetts,  Washington  or  Tennessee,  that 
in  the  State  of  Indiana  laws  of  this  character  cannot  be  upheld. 


278 

Because  the  bill  arbitrarily  despoils  the  citizen  of  his  property 
without  due  process  of  law;  discriminates  between  merchants  and 
other  classes  of  citizens  in  their  right  and  power  to  dispose  of  their 
property ;  discriminates  between  solvent  merchants  who  are  in- 
debted and  merchants  who  are  free  from  debt,  in  their  right  and 
power  to  dispose  of  property ;  and  gives  to  citizens,  other  than 
merchants,  privileges  and  immunities  that  are  not  enjoyed  by  mer- 
chants who  stand  upon  the  same  footing  as  such  other  citizens,  I  am 
compelled  to  withhold  executive  approval  from  such  measure. 

If  a  measure  were  passed  applying  only  to  insolvent  persons 
selling  stocks  of  merchandise  in  bulk,  I  believe  it  would  be  a  valid 
exercise  of  legislative  power,  and  I  would  give  it  my  approval. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  174. 


MARCH  6,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives : 

I  return  herewith  House  Bill  No.  174  without  my  approval. 

The  bill  provides  for  the  extension  of  library  privileges  to 
counties  and  townships  in  which  free  public  libraries  may  be  located, 
upon  the  filing  of  notice  by  the  managing  board  of  any  such 
library  with  the  board  of  county  commissioners  of  such  county,  or 
with  the  advisory  board  of  any  such  township,  as  the  case  may  be, 
and  upon  the  acceptance  by  such  respective  boards  of  the  condi- 
tions named  in  such  notice,  and  the  appropriation,  out  of  the  gen- 
eral fund  of  such  county  or  township,  of  a  sum  equal  to  the  fund 
which  will  be  produced  by  a  certain  named  rate  of  taxes  upon  the 
taxable  property  of  said  county  or  township,  as  the  case  may  be, 
outside  of  such  city  where  said  library  may  be  located,  and  in  case 
of  the  county,  outside  of  the  limits  of  any  township  in  the  county 
then  maintaining  a  free  public  library  by  a  tax  under  existing 
lafws. 

Under  the  provisions  of  the  bill  all  property  within  the  limits 
of  any  city  in  such  township  where  such  library  is  located,  is  omit- 
ted from  the  tax  levy  required  to  be  made  by  such  township. 

In  case  of  the  county,  all  property  located  within  the  limits  of 
such  city  or  within  the  limits  of  any  township  in  which  a  free 


279 

library  is  maintained  by  taxation,  is  omitted  from  the  tax  levy  re- 
quired to  be  made  by  the  county. 

In  other  words,  the  bill  provides  for  the  laying  of  a  township 
tax  for  library  purposes  that  is  not  uniform  throughout  the  town- 
ships, and  from  which  certain  property  in  certain  portions  of  the 
township,  that  is,  property  within  such  city  where  such  library  is 
located,  is  exempt. 

It  also  provides  for  the  levying  of  a  county  tax  for  library 
purposes  that  is  not  uniform  throughout  the  county,  and  from 
which  property  within  such  incorporated  city  where  such  library 
is  situated,  or  within  any  township  in  such  county  which  is  main- 
taining a  library  by  taxation,  is  exempt. 

The  taxing  district  of  a  township,  for  the  purpose  of  laying  a 
township  tax,  is  the  entire  township.  Any  such  tax  so  laid  by  such 
township  must  be  laid  upon  all  the  property  of  the  township. 

The  taxing  district  of  a  county,  for  the  purpose  of  laying  a 
county  tax,  is  the  entire  county.  It  includes  all  townships  and  all 
cities  within  the  borders  of  the  county.  Such  a  tax  laid  by  such 
county  must  be  laid  upon  all  the  property  of  the  county. 

Such  a  tax  as  the  one  authorized  by  the  provisions  of  the  meas- 
ure under  consideration,  cannot  be  laid  either  by  the  township  or 
the  county. 

The  Constitution  of  the  State,  Article  10,  Section  1,  provides: 

"The  General  Assembly  shall  provide  by  law  for  a  uniform  and  equal 
rate  of  assessment  and  taxation,"  *  *  *. 

The  above  provision  has  received  judicial  construction,  and  its 
meaning  relative  to  the  question  now  under  consideration  is  well- 
established. 

In  an  early  and  well-considered  case,  it  is  said,  in  reference  to 
this  section : 

"The  section  does  not  require  that  the  rate  of  assessment  shall  be  uniform 
and  equal  for  all  purposes  throughout  the  State;  and  we  think  its  meaning 
clearly  is,  that  the  rate  of  assessment  and  taxation  must  be  uniform  and 
equal  throughout  the  locality  in  which  the  tax  is  levied.  If  the  levy  is  for 
State  purposes,  then  the  rate  must  be  uniform  and  equal  in  all  parts  of  the 
State;  and  if  the  levy  be  for  county  purposes,  the  rate  must  be  uniform 
and  equal  throughout  the  county  in  which  the  levy  is  made;  and  so  in  town- 
ships when  the  levy  is  for  township  or  road  purposes.  It  was  simply  intended 
that  the  uniformity  and  equality  of  rate  should  be  co-extensive  with  the 
territory  to  which  the  tax  applies.  Taxes  are  public  burdens,  which  should 
be  borne  by  all,  and  it  was  evidently  the  object  of  the  convention,  in  the 
adoption  of  this  and  other  provisions  of  the  Constitution,  to  devise  a  system 


280 

for  the  Assessment  and  levy  of  taxes  that  would  distribute  these  burdens 
among  those  liable  to  them,  upon  principles  of  uniformity,  equality  and  j  us- 
tice.  To  this  £nd  the  primary  principle  adopted  is,  that  taxes  shall  be 
assessed  on  the  property  liable  thereto  according  to  its  just  value  and  by 
uniform  and  equal  rate." 

Bright  v.  McCullough,  27  Ind.  230. 

In  the  course  of  the  opinion  in  the  above  case  the  court  quotes 
with  approval  the  following  from  the  opinion  by  Rainey,  C.  J., 
in  the  case  of  City  of  Zanesville  v.  Richards,  5  Ohio  St.  589 : 

"Without  express  authority  of  law,  no  tax,  either  for  state,  county,  town- 
ship or  corporation  purposes,  can  be  levied;  and  we  see  no  reason  to  doubt 
that  this  section  of  the  Constitution  is  equally  applicable  to,  and  furnishes 
the  governing  principles  for,  all  laws  authorizing  taxes  to  be  levied  for  either 
purpose.  The  great  object  of  the  provision  was  to  secure  equality  and  uni- 
formity in  the  imposition  of  these  public  burdens.  The  convention  was  well 
aware  that  much  the  largest  part  would  be  required  to  answer  the  purpose 
of  these  local  sub-divisions,  and  equally  aware  that  it  could  only  be  levied 
as  the  General  Assembly  should  provide.  In  establishing  this  principle  of 
justice  and  equality,  they  have  made  it  the  fundamental  rule  upon  which  all 
such  laws  must  be  based ;  and  its  spirit  and  purpose  can  only  be  preserved 
by  holding  that  it  requires  a  uniform  rate  per  cent,  to  be  levied  upon  all 
property  according  to  its  true  value  in  money,  within  the  limits  of  the  local 
sub-division  for  \vhich  the  revenue  is  collected." 

Again,  it  is  said  in  the  case  of  Bright  v.  McCullough,  supra, 
in  quoting  from  the  opinion  in  the  case  of  Exchange  Bank  of  Co- 
lumbus v.  Hiries,  3  Ohio  St.  1 : 

"Uniformity  in  taxing  implies  equality  in  the  burden  of  taxation,  and 
this  equality  of  burden  cannot  exist  without  uniformity  in  the  mode  of 
assessment  as  well  as  in  the  rate  of  taxation.  But  this  is  not  all.  The 
uniformity  must  be  co-extensive  with  the  territory  to  which  it  applies.  If 
a  state  tax,  it  must  be  uniform  over  all  the  State;  if  a  county,  town  or  city 
tax,  it  must  be  uniform  throughout  the  extent  of  the  territory  to  which  it 
is  applicable." 

The  case  of  Bright  v.  McCullough,  supra,  has  never  to  my 
knowledge  been  overruled,  criticised  or  modified,  but  has  been  many 
times  cited  with  approval  by  the  Supreme  Court  of  this  State. 

Henderson  v.  London,  etc.,  Co.,  135  Ind.  37; 
Cleveland,  etc.,  Co.  v.  Backus,  133  Ind.  535; 
Pittsburg,  etc.,  Co.  v.  Backus,  133  Ind.  647. 

In  the  first  of  these  cases  the  principle  here  under  considera- 
tion is  expressed  in  the  following  language: 

"The  taxing  district  of  the  State,  wherein  taxes  are  directed  for  the 
benefit  of  those  serving  the  State,  is  the  whole  State.  State  taxes  are  not  of 


281 

uniform  and  equal  rate  when  they  apply  to  a  portion  of  a  class  only  and 
omit  a  portion  of  the  same  class,  and  this  is  no  less  true  because  the  classes 
may  be  divided  by  county  lines." 

In  the  case  last  cited,  the  following  declaration  is  made : 
"There  is  uniformity  and  equality  of  assessment  and  taxation  when  all 
the  property  is  to  be  assessed  at  its  true  cash  value,  and  the  same  rate  is 
fixed  on  all  property  subject  to  assessment  for  the  tax.  If  it  be  a  tax  for 
State  purposes,  the  rate  must  be  the  same  throughout  the  State;  if  for  county 
purposes  or  township  purposes,  the  same  rule  would  apply." 

The  tax  authorized  to  be  levied  by  the  county  under  the  provi- 
sions of  the  measure  returned  herewith,  is  a  county  tax  for  library 
purposes,  and  the  tax  authorized  thereby  to  be  levied  by  the  town- 
ship, is  a  township  tax  for  library  purposes.  The  taxes  paid  un- 
der the  county  levy  go  into  the  general  fund  of  the  county,  and 
those  paid  into  the  township  levy  go  into  the  general  fund  of  the 
township,  and  the  sums  paid  to  the  library,  for  the  maintenance  of 
which  such  tax  is  levied,  are  required  to  be  paid  from  the  general 
fund  of  the  county  or  of  the  township,  as  the  case  may  be. 

It  has  been  said  that  the  reason  why  the  property  in  the  city 
where  the  library  is  located  is  exempt  from  taxation  by  the  county, 
is  found  in  the  fact  that  the  common  council  of  such  city,  under 
existing  law,. may  levy  a  tax  for  the  maintenance  of  such  library 
upon  the  property  within  the  city  limits.  It  is  also  urged  that  a 
township  that  has  within  its  borders  a  free  library  which  it  is  main- 
taining by  a  tax  levy  upon  the  property  of  such  township,  ought  to 
be  exempt  from  the  payment  of  the  tax  levied,  for  the  maintenance 
of  a  library,  by  the  county  in  which  such  township  is  located.  It  is 
further  said  that  neither  the  property  in  such  city  nor  the  property 
in  such  township  is  in  fact  exempt  from  taxation  for  library  pur- 
poses. This  argument,  however  true  it  may  be  in  fact,  does  not 
meet  the  constitutional  objection.  The  city  tax  is  laid  by  a  dif- 
ferent authority  and  is  different  in  rate  from  the  county  tax,  and 
the  same  is  true  of  the  township  tax.  In  neither  case  would  there 
be  uniformity  of  rate. 

I  am  in  sympathy  with  the  purpose  sought  to  be  effected  by 
the  provisions  of  the  bill  under  consideration,  but  it  is  so  clearly 
within  the  constitutional  inhibition  requiring  a  uniform  rate  of 
taxation  that  I  am  compelled  to  refuse  it  executive  approval. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


282 
HOUSE  BILL  No.  226. 

MARCH  6,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  226  without  my  approval, 
because  of  its  defective  title. 

It  purports  to  amend  an  act  approved  February  24,  1899, 
which  act  was  an  amendment  of  an  act  approved  March  8,  1897. 

The  title  of  the  act  of  1897  is  set  out  accurately  and  in  full, 
but  the  title  of  the  act  sought  to  be  amended,  that  is  the  act  of 
1899,  is  not  set  out  nor  even  attempted  to  be  set  out. 

Section  21,  Article  4,  of  the  Constitution  provides: 

"No  act  shall  ever  be  revised  or  amended  by  mere  reference  to  its  title; 
but  the  act  revised  or  section  amended  shall  be  set  forth  and  published  at 
full  length." 

R.  S.  1901,  Sec.  117. 

The  only  reference  made  to  the  act  of  1899,  this  being  the  act 
which  is  sought  to  be  amended,  either  in  the  title  or  in  the  body  of 
the  bill,  follows  the  title  of  the  act  of  1897,  as  set  out,  and  is  as 
follows : 

"And  the  act  amendatory  thereof,  approved  February"  24,  1899,  and 
declaring  an  emergency,  the  same  being  Section  8075a  of  the  Revised  Statutes 
of  the  State  of  Indiana  of  1901." 

In  the  case  of  Citizens,  etc.,  Company  v.  Haugh,  142  Ind.  254, 
the  date  of  the  approval  of  an  act  is  declared  to  be  no  part  of  its 
title.  Therefore,  the  words  in  the  title  of  the  bill  under  considera- 
tion, "and  the  act  amendatory  thereof,  approved  February  24, 
1899,  and  declaring  an  emergency,  the  same  being  Section  8075a 
of  the  Revised  Statutes  of  the  State  of  Indiana,"  are  no  part  of 
the  title  of  the  act  sought  to  be  amended. 

It  has  also  been  decided  that  where  the  title  to  an  amendatory 
statute  refers  to  and  sets  forth  the  title  of  an  act  which  has  there- 
tofore been  amended,  and  does  not  refer  to  or  recite  the  title  of  such 
act  as  amended,  a  designation  of  the  statute  sought  to  be  amended 
is  insufficient,  although  the  section  attempted  to  be  amended  is  re- 
ferred to  as  being  a  designated  section  of  the  Revised  Statutes  of 
1881. 

Boreing  v.  State,  141  Ind.  640; 
Feibleman  v.  State,  98  Ind.  516; 
Linquest  v.  State,  153  Ind.  543. 


In  the  last  cited  case  the  court  announces  the  rule  as  follows  : 
"It  is  settled  by  the  decisions  of  this  court  Hint,  iti  the  revision  of  an 
act  or  the  amendment  of  a  section,  two  things  are  required:  (1)  The  title 
of  the  act  to  he  amended  must  he  referred  to  l.y  selling  it  out;  (£)  The 
aet  as  revised,  or  section  as  fimended,  must  he  set  forth,  ;md  published  at 
full  length"  *  *  *. 

"When  the  act  is  identified  in  the  manner  required  by  the  Constitution, 
and  it  is  not  certain  what  act  was  intended  to  be  amended,  the  court  will 
resort  to  meatas  other  than  the  title  to  determine  what  act  was  intended. 
But  if  the  act  is  not  identified  in  the  manner  required  by  the  Constitution, 
the  court  cannot  resort  to  other  means  of  identification,  although  a  resort 
to  such  other  means  would  point  out  the  act  intended  beyond  any  question." 

The  act  of  1897  consisted  of  a  single  section  other  than  an 
emergency  clause.  The  act  of  1899  amended  that  section.  There- 
fore, the  act  of  1897  ceased  upon  amendment  to  exist.  As  the  title 
to  the  bill  under  consideration  now  stands,  it  sets  out  the  title  to 
the  act  of  1897,  and  thereby  seeks  to  amend  an  act  not  in  existence. 
An  attempt  to  amend  an  act  not  in  existence  is  not  valid  for 
any  purpose. 

Draper  v.  Falley,  38  Ind.  465  ; 

Blackmore  v.  Dolan,  50  Ind.  194; 

Feibleman  v.  State,  98  Ind.  516. 

The  purpose  of  the  bill  returned  herewith  is  a  proper  one,  and 
if  the  title  were  not  fatally  defective  I  would  give  it  my  approval. 
As  it  is,  however,  I  can  not  do  so. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


HOUSE  BILL  No. 


MARCH  6,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives : 
I  return  herewith  House  Bill  No.  362  without  my  approval. 
The  bill  authorizes  the  common  council  of  cities  not  operating 
under  a  special  charter  and  the  board  of  trustees  of  towns,  where 
such  cities  and  towns  own  their  own  system  of  water  works,  to  or- 
der the  extension  of  the  water  mains  of  such  water  works  system 
and  the  laying  of  house  connections  thereto  along,  in  and  upon 
such  streets  as  such  council  or  such  board  of  trustees  may  from 
time  to  time  deem  necessary,  and  provides  that  the  cost  of  con- 


284 

structing  and  laying  such  water  mains  and  the  house  connections 
thereto  shall  be  assessed  upon  the  property  abutting  upon  the 
streets  where  said  water  mains  are  laid,  in  proportion  to  the  bene- 
fits derived  therefrom. 

These  provisions  are  so  unfair  and  unjust  to  the  citizens  and 
taxpayers  of  such  cities  and  towns  living  upon  streets  where  such 
water  mains  may  be  laid,  as  to  preclude  executive  approval. 

Every  water  works  system  owned  by  any  city  or  town  in  the 
State  has  been  purchased  or  constructed  at  the  expense  of  all  the 
taxpayers  in  the  city  or  town  owning  the  same.  Property  owners 
living  upon  streets  where  no  water  mains  are  now  located  have  con- 
tributed as  much  to  the  payment  of  the  cost  of  constructing  or 
purchasing  such  water  works  system,  in  proportion  to  the  value 
of  the  property  owned  by  them,  as  have  any  of  the  other  citizens 
of  such  town  or  city.  They  have  the  same  right  to  water  privileges 
that  such  other  citizens  may  have  and  upon  the  same  terms.  The 
bill  under  consideration  ignores  that  right  entirely,  and  vests  the 
arbitrary  power  in  the  common  council  of  a  city  or  the  board  of 
trustees  of  a  town  to  construct  and  lay  such  water  mains  upon  any 
such  street  and  to  assess  the  entire  cost  thereof  against  such  prop- 
erty owners  without  their  consent  and  against  their  wishes.  If 
such  water  mains  are  constructed  and  laid  upon  such  streets,  and 
the  property  owners  thereon  are  compelled  to  pay  special  assess- 
ments to  defray  the  expense  of  constructing  and  laying  the  same, 
they  will  be  compelled  to  contribute  in  an  unequal  and  unjust  de- 
gree to  the  cost  and  maintenance  of  a  system  of  water  works  which 
belongs  to  the  whole  people.  Such  system  should  be  established 
from  a  fund  derived  from  a  uniform  rate  of  taxation  resting  alike 
upon  all  citizens  of  the  city  or  town,  and  not  in  part  from  a  fund 
to  which  all  citizens  have  contributed  alike  according  to  the  value 
of  the  property  owned  by  them,  and  in  part  from  a  special  assess- 
ment resting  upon  a  few  of  such  taxpayers.  The  burden  of  the 
cost  of  constructing  and  maintaining  such  system  rests  unfairly 
upon  the  citizens  whose  property  is  especially  assessed,  to  the  ex- 
tent of  the  special  assessment  laid.  This  I  think  ought  not  to  be. 

The  power  to  construct  and  lay  water  mains  upon  any  of  the 
streets  of  any  of  such  cities  or  towns,  is  an  arbitrary  power  under 
the  provisions  of  this  measure,  vested  wholly  in  the  discretion  of 
the  common  council  or  the  board  of  trustees  of  such  city  or  town. 
The  proceeding  to  construct  and  lay  such  water  mains  upon  any 
such  street  is  not  required  to  be  initiated  by  any  persons  owning 
property  thereon.  They  have  no  choice  in  the  premises.  The  im- 


285 

provement  may  be  made  against  their  wish  and  over  their  protest. 
It  is  theirs  only  to  pay  the  unequal  burden  imposed. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  374. 


MARCH  6,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  374  without  my  approval. 

The  bill  provides  for  the  construction  of  court  houses  in  all 
counties  of  the  State  having  a  population  of  not  less  than  20,870, 
nor  more  than  21,000.  In  effect,  it  divides  the  ninety -two  counties 
of  the  State  into  three  classes,  viz. :  those  having  a  less  population 
than  20,870 — those  having  a  population  of  more  than  21,000 — 
and  those  having  a  population  between  20,870  and  21,000. 

The  provisions  of  the  bill  apply  only  to  the  last  named  class  of 
counties.  It  will  be  noticed  that  the  difference  in  population  be- 
tween the  counties  of  the  first  class,  having  the  maximum  popula- 
tion, and  those  of  the  second  class,  having  the  minimum  population, 
is  only  130,  and  that  the  counties  of  the  third  class,  and  to  which 
the  provisions  of  the  bill  apply,  must  be  found  between  that  nar- 
row limitation. 

In  terms  the  bill  is  general,  but  no  one  is  deceived  thereby.  In 
effect,  it  is  local  and  special,  and  applies  to  but  one  county  in  the 
State — Monroe,  that  being  the  only  county  in  the  State  shown  by 
the  last  United  States  census  to  have  a  population  between  20,870 
and  21,000.  No  other  county  in  the  State  comes  within  the  limi- 
tation named.  In  all  such  cases  the  subterfuge  of  arbitrary  classi- 
fication might  as  well  be  dispensed  with,  and  the  name  of  the 
county  sought  to  be  affected  boldly  written  into  the  bill.  The 
measure  under  consideration  might  as  well  have  contained  the 
name  of  Monroe  County,  and  have  been  entitled,  "An  act  concern- 
ing the  construction  of  a  court  house  in  Monroe  County."  Its 
meaning  would  have  been  exactly  the  same,  and,  in  addition,  it 
would  have  been  an  honest  declaration  of  its  purpose.  The  ostrich 
that  hides  his  head  in  the  sand,  believing  his  body  to  be  thereby  con- 
cealed, fools  no  one  but  himself. 

That  such  acts  are  local  and  special  in  character  has  been  de- 


28(5 

cided  by  the  Supreme  Court  so  often  and  so  recently  that  the  deci- 
sions ought  to  lie  fresh  in  the  minds  of  even  the  laity. 

In  re  Application  of  Hank  of  Commerce,  15'}  Ind.  4>74< ; 
Board  v.  Spangler,  159  Ind.  579; 
School  City  of  Rushville  v.  Hays,  162  Ind.  198; 
The  Town  of  Longview  v.  City  of  Crawfordsville,  No.  20,- 
274,  handed  down  January  13,  1905. 

In  the  second  case  cited  above,  an  act  of  the  General  Assembly, 
approved  March  4,  1899,  making  an  arbitrary  classification  of 
counties  between  those  having  a  population  of  15,000  and  15,050, 
according  to  the  last  Federal  census  was  under  consideration.  The 
court  said: 

"This  court  takes  judicial  notice  of  the  population  of  the  counties  of  this 
State  according  to  the  Federal  census  of  1890.  It  is,  therefore,  advised  that 
the  only  county  in  this  State  that  had  a  population  between  15,000  and  15,050, 
according  to  the  Federal  census  of  1890,  was  Owen  County.  As  the  popula- 
tion referred  to  in  said  act  was  to  be  determined  according  to  a  particular 
past  census,  so  that  other  counties  could  not  subsequently  enter  the  class,  it 
is  apparent  that  by  said  act  the  General  Assembly,  in  effect,  sought  to  provide 
that  the  provisions  of  the  general  act  of  February  27,  1899,  should  not  apply 
to  certain  described  proceedings  to  improve  gravel  roads  in  the  county  of 
Owen.  *  *  The  attempted  exclusion  of  pending  proceedings  for  the 

improvement  of  gravel  roads  in  Owen  County  from  the  operation  of  the 
general  law  was  in  effect  an  attempt  to  provide  by  a  local  law  not 

alone  for  an  issue  of  bonds,  but  for  the  levy  of  a  tax  that,  under  existing 
law,  constitutes  the  means  of  retiring  such  bonds.  We  think  that  it  was  not 
competent  for  the  General  Assembly  to  make  such  exception.  As 

the  subject  of  the  legislation  falls  within  Section  22,  of  Article  4,  of  the 
State  Constitution,  we  hold  that  the  proceedings  could  not  be  validated  by 
any  act  that  could  properly  be  characterized  as  local  or  special." 

The  Sixty-third  General  Assembty  enacted  nine  laws  arbitrarily 
establishing  classifications  of  counties  and  cities  upon  differences  of 
population  varying,  as  to  the  classes  legislated  for,  from  5  to  1,000. 
In  considering  one  of  these  acts  in  a  recent  case,  the  Supreme  Court 
said: 

"Its  legal  foundation  is  not  more  secure  than  if  it  had  been  declared 
to  apply  to  all  cities  and  towns  bearing  the  name  of  Rushville,  as  shown 
by  the  last  preceding  census.  The  classification  is  entirely  arbitrary  and 
artificial,  and  the  plain  command  of  the  Constitution  cannot  be  evaded  by  so 
weak  and  transparent  a  device. 

"Let  it  be  supposed  that  the  act  of  March  9,  1903,  supra,  is  valid,  what 
provision  of  the  Constitution  cannot  be  rendered  nugatory  by  similar  evasions. 
If  cities  and  towns  may  be  classified  according  to  trifling  differences  in 
population,  so  may  counties  and  townships.  By  means  of  statutes,  general 


287 

in  form,  but  local  and  special  in  purpose,  resting  entirely  upon  slight  differ- 
ences in  population,  every  provision  of  Article  4,  Section  22,  of  the  Consti- 
tution may  be  successfully  evaded. 

"Inferior  in  dignity  and  force  of  obligation  only  to  the  Constitution  of  the 
United  States  and  the  acts  of  Congress  and  treaties  made  under  it,  the  State 
Constitution  is  the  supreme  law  of  the  Commonwealth.  It  is  to  be  interpreted 
and  applied  in  a  reasonable  manner;  it  is  to  be  observed  and  obeyed,  and 
not  evaded  and  defeated  by  distinctions  and  classifications  which  rest  upon 
no  rational  or  natural  basis,  and  which  deceive  no  one.  When  it  declares  that 
the  General  Assembly  shall  not  pass  local  or  special  laws  providing  for  sup- 
porting common  schools  and  for  the  preservation  of  school  funds,  its  man- 
date cannot  be  defeated  by  creating  a  class  of  cities  differing  in  no  material 
respect  from  scores  of  others  in  the  State.  The  mere  convenience  of  local 
communities,  the  financial  necessities  of  particular  cities,  the  conflicting  views 
of  citizens  on  the  subject  of  the  necessity  for  the  erection  of  school  buildings, 
are  not  sufficient  to  authorize  legislation  which  the  Constitution  prohibits. 
Attempted  evasions  of  the  Constitution,  the  object  of  which  is  to  meet  and 
overcome  such  local  and  special  conditions,  cannot  be  tolerated.  A  due  re- 
gard for  the  highest  interests  of  the  citizens  of  the  State  requires  that  all  con- 
stitutional limitations  and  restrictions  shall  be  firmly  and  constantly  en- 
forced." 

The  School  City  of  Rushville  v.  Hayes,  162  Ind.  198. 

In  the  case  of  the  Town  of  Longview  v.  City  of  Crawfofds- 
villc,  supra,  construing  another  act  of  the  Sixty-third  General  As- 
sembly, in  a  decision  rendered  as  late  as  the  13th  day  of  January, 
1905,  the  same  court  said: 

"In  jurisdictions  where  classification  is  permitted  by  the  organic  law,  it 
is  settled  that  the  same,  in  order  to  furnish  a  basis  for  legislation  that  will 
exempt  it  from  the  charge  of  being  special,  must  be  a  classification  which  in 
the  nature  of  things  suggests  and  furnishes  a  reason  for,  and  justifies  the 
making  of  the  class.  The  reason  for  the  classification  must  inhere  in  the  sub- 
ject-matter, and  the  same  must  be  natural,  not  artificial.  Under  this  rule, 
neither  mere  isolation  nor  arbitrary  selection  is  proper  classification." 

In  the  statute  above  referred  to  the  classification  made  was 
based  on  a  difference  of  1,000  in  population.  The  court  held  it  to 
be  an  arbitrary  classification,  and  in  the  course  of  its  opinion  said: 

"Applying  these  tests,  it  is  evident  that  the  classification  in  said  act  is 
merely  arbitrary  and  cannot  relieve  the  same  from  the  infirmity  of  being 
special  and  local.  There  is  no  reason  inhering  in  the  subject-matter  of  the 
act  for  giving  the  power  mentioned  therein  to  cities  of  a  population  between 
six  and  seven  thousand  according  to  the  last  preceding  United  States  census, 
and  not  giving  the  same  to  the  other  cities  in  the  State." 

In  the  measure  under  consideration  the  classification  of  coun- 
ties is  based  upon  a  difference  in  population  of  only  130,  and  is, 
therefore,  clearly  within  the  rule  above  declared. 


288 

There  can  be  no  doubt  of  the  local  and  special  character  of  this 
bill.  That  fact  is  established,  and  may  as  well  be  admitted.  To 
admit  the  local  and  special  character  of  the  bill,  however,  is  to  ad- 
mit its  invalidity,  if  we  keep  in  mind  the  fact  that  its  purpose  is 
the  construction  of  a  court  house  in  Monroe  County. 

The  Constitution  provides: 

"The  General  Assembly  shall  not  pass  local  or  special  laws  in  any  of  the 
following  enumerated  cases,  that  is  to  say :  Regulating  county  and 

township  business." 

Article  4,  Section  22,  State  Constitution. 

Constructing  a  court  house  is  county  business.  That  it  is 
county  business  has  been  clearly  and  unequivocally  decided  by  the 
Supreme  Court  in  an  able  and  well-considered  opinion  filed  Janu- 
ary 8,  1904. 

Board  v.  State,  161  Ind.  618. 

In  the  above  case  the  question  was  fairly  presented  and  point- 
edly decided.  It  involved  the  validity  of  an  act  providing  for  the 
change  of  the  county  seat  in  Newton  County  and  the  construction 
of  a  court  house  in  said  county.  Speaking  of  the  question  pre- 
sented the  court  said: 

"The  decision  of  the  question  involves  the  inquiry  (1)  is  the  building  of 
a  county  court  house  for  county  purposes  with  county  revenue  county  busi- 
ness *  *  *.  If,  when  the  Constitution  was  adopted,  the  building  of  a 
county  court  house,  with  county  means,  upon  county  grounds,  for  county  pur- 
purposes,  was  generally  considered  and  treated  over  the  State  as  county 
business,  and  was  intended  by  the  Convention  to  be  embraced  within  the  classi- 
fication of  county  business,  as  contained  in  Section  22,  Article  4,  then  it  must 
be  held  that  the  Legislature  had  no  power  to  pass  a  local  or  special  law  regu- 
lating the  same.  To  regulate  is  to  direct  by  rule  or  restriction.  The  phrase 
'county  business'  has  no  prescribed  or  technical  meaning,  and  the  definition 
must  be  sought  in  the  previous  history  and  practices  of  the  State." 

After  a  careful  and  learned  review  of  the  history  and  practices 
of  the  State  in  this  regard,  including  consideration  and  review  of 
the  debates  in  the  Constitutional  Convention  upon  the  question,  the 
court  continues: 

"From  these  considerations,  and  others  that  might  be  brought,  we  come 
unhesitatingly  to  the  conclusion  that  the  building  of  court  houses  in  the  sev- 
eral counties  of  the  State  was  understood  by  the  people  and  framers  of  the 
Constitution  as  being  county  business,  and  was  intended  by  the  latter  to  be 
embraced  by  the  term  as  implied  in  Section  22,  Article  4." 

I  am  thoroughly  convinced  that  the  provisions  of  the  bill  under 
consideration,  making  an  arbitrary  classification  of  counties  based 


289 

upon  a  difference  of  130  in  population,  make  it  local  and  special 
in  character. 

I  am  equally  well  convinced  that  providing,  as  it  does,  for  the 
construction  of  a  court  house,  it  is  a  measure  to  regulate  county 
business,  and  is  within  the  inhibition  of  Section  22,  Article  4,  of 
the  Constitution. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  65. 


MARCH  8,  1905. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  deposit  herewith  House  Bill  No.  65  with  the  Secretary  of 
State  without  my  approval,  pursuant  to  the  provisions  of  the  Con- 
stitution of  the  State,  and  submit  herewith  my  reasons  for  so  doing. 
The  bill  concerns  gravel  and  macadamized  roads  on  township 
lines,  and  provides  for  the  construction  of  such  roads  on  petitions 
signed  by  a  majority  of  the  freeholders  of  the  townships  affected 
by  the  proposed  road.  The  same  subject-matter  is  covered  by 
Senate  Bill  No.  77,  which  has  this  day  received  executive  approval, 
except  that  in  the  Senate  bill  the  question  of  constructing  such 
roads  on  township  lines  is  required  to  be  submitted  to  the  people  of 
the  townships  affected  at  an  election  to  be  held  for  that  purpose. 

I  believe  the  provisions  of  the  Senate  bill  are  better  than  the 
provisions   of  the  bill  herewith   deposited.      I   therefore  withhold 
executive  approval  from  said  House  Bill  No.  65. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


[19—19891] 


Senate  Veto  Messages,  Sixty-Fifth 
General  Assembly 


(291) 


293 
SENATE  BILL  No.  110. 


FEBRUARY  15,  1907. 

Mr.  President  and  Gentlemen  of  the  Senate: 

I  return  herewith  Senate  Bill  No.  110,  the  same  being  a  bill 
to  amend  section  470  of  an  act  entitled  "An  act  concerning  pub- 
lic offenses,"  approved  March  10,  1905,  without  my  approval. 

The  section  sought  to  be  amended  makes  the  visiting  or  fre- 
quenting of  a  house  or  houses  of  ill-fame  or  assignation  by  a  male 
person,  except  as  a  physician,  a  misdemeanor  and  provides  pun- 
ishment by  fine  and  imprisonment  upon  conviction. 

The  vice  sought  to  be  reached  and  restrained  is  one  of  the 
most  hateful  and  demoralizing  known  to  society.  The  section  re- 
ferred to  is  sought  to  be  amended  in  two  particulars.  First:  The 
punishment  provided  is  changed  from  fine  and  imprisonment  to 
fine  or  imprisonment,  in  the  discretion  of  the  court.  It  may  be  and 
perhaps  is  advisable  to  make  this  change.  If  this  were  the  extent 
of  the  amendment  I  would  have  approved  it.  The  other  amend- 
ment sought,  however,  is  of  a  different  character.  The  statute 
now  reads:  "Whoever  being  a  male  person  frequents  or  visits  a 
house  or  houses  of  ill-fame  or  of  assignation,  except  as  a  physi- 
cian, *  *  *  shall  be  fined,"  etc.  The  amendment  adds  an 
additional  exception  to  the  inhibition  of  the  statute  by  inserting 
after  the  word  "physician"  the  following  words:  "Or  other  per- 
sons upon  legitimate  business."  The  effect  of  this  amendment 
would  be  to  throw  the  burden  of  disproving  the  exception  upon 
the  State.  This  is  well  settled  by  judicial  authority. 

The  following  is  a  clear  statement  of  the  law  applicable  to  the 
case: 

"The  law  in  relation  to  exceptions  in  a  statute  is,  that  if  the  exception 
he  contained  in  a  subsequent  clause  or  statute,  it  is  a  matter  of  defense,  and 
need  not  be  negatived  in  the  indictment;  hut  if  it  be  closely  connected  with 
the  enacting  clause,  or  if  it  be  in  the  same  clause  of  the  act  which  creates 
an  offense,  it  is  necessary  to  show,  by  negative  averment,  that  the  defendant 
is  not  within  the  exception." 

Russell  v.  State,  50  Ind.  at  174 ; 

Cleveland,  etc.,  Railway  Co.  v.  Gray,  148  Ind.  at  275 ; 
Chicago,  etc.,  Railway  Co.  v.  Vert,  24  Ind.  App.  at  80: 
Turner  v.  State,  151  Ind.  at  248. 

Under  the  rule  here  declared  it  is  clear  that  the  effect  of  the 
exception  of  "other  persons  upon  legitimate  business"  would  be 


294 

to  require  the  State  to  aver,  in  every  affidavit  or  indictment  charg- 
ing the  offense  described  in  the  section,  and  upon  the  trial  to  prove 
beyond  a  reasonable  doubt,  that  the  defendant  was  not  visiting  or 
frequenting  the  forbidden  house  upon  legitimate  business.  Such 
a  requirement  would  put  an  unnecessary  burden  upon  the  State  in 
every  such  case.  It  would  make  the  proof  difficult  in  all  cases  and 
impossible  in  many.  Efforts  to  make  the  proof  in  criminal  cases 
more  difficult  are  to  be  looked  upon  with  concern  and  apprehension 
rather  than  approval. 

Our  criminal  laws  do  not  need  amendment  in  this  regard.  This 
is  especially  true  of  the  present  statute.  There  is  no  need  of  the 
amendment.  No  person  visiting  any  such  house  on  any  lawful  *mis- 
sion  is  in  danger  of  conviction  under  the  present  statute.  Its  ef- 
fect would  be  nullification  and  not  amendment. 

For  these  reasons  I  am  compelled  to  withhold  executive  ap- 
proval. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

SENATE  BILL  No.  126. 


FEBRUARY  15,  1907. 

Mr.  President  and  Gentlemen  of  the  Senate: 

Senate  Bill  No.  126  is  herewith  returned  without  executive  ap- 
proval. 

The  purpose  of  the  bill  is  to  authorize  certain  cities  to  make 
appropriations  of  money  and  to  levy  a  special  tax  for  the  support 
of  hospitals  in  certain  instances  named. 

The  title  of  the  bill  is  defective,  in  that  only  one  of  these  pur- 
poses, that  of  authorizing  such  cities  to  make  appropriations  of 
money  for  the  support  of  such  hospitals,  is  named.  The  other 
purpose,  that  of  authorizing  such  cities  to  levy  a  tax  for  the  sup- 
port of  such  hospitals,  is  wholly  omitted. 

Section  19  of  the  Constitution  requires  the  subject  of  every 
act  to  be  expressed  in  the  title  and  declares  void  so  much  of  any 
act  as  is  not  expressed  in  the  title. 

R.  S.  1901,  Sec.  115. 


295 

Upon  this  subject  the  Supreme  Court  of  the  State,  in  a  well- 
considered  opinion,  declared  the  rule  to  be  as  follows : 

"If  the  subject  is  composed  of  two  or  more  essential  elements,  the  expres- 
sion of  one  of  such  elements  in  the  title  would  not  suffice.  The  absence  of 
one  of  such  elements  in  the  title  would  be  as  misleading,  and  might  be  as  per- 
nicious, as  the  evils  sought  to  be  obstructed  by  the  Constitution.  *  *  * 

"In  State  v.  Young,  47  Ind.  150,  a  test  was  prescribed  for  determining  if 
the  subject  is  expressed  in  the  title.  It  was  said,  in  speaking  of  that  element 
of  the  subject  claimed  to  be  absent  from  the  title:  'Suppose  that  there  was 
no  other  provision  in  the  act.  *  *  *  If  the  section  could  not  thus  stand 
alone  under  the  title,  it  must  fall.'  We  apprehend  that  this  is  always  true 
where  only  a  part  of  the  subject  is  expressed,  and  that  it  is  especially  true 
where  that  part  of  the  subject  omitted  from  the  title  is  not  naturally  or  or- 
dinarily connected  with  that  part  of  the  subject  which  is  expressed  in  the 
title.  *  *  * 

"The  requirement  that  the  subject  expressed  should  apprise  the  people  of 
the  subject  of  legislation,  in  order  that  an  opportunity  for  a  hearing  or  for 
petition  may  be  had,  is  far  from  being  complied  with  in  the  act  before  us.     No 
notice  whatever  to  those  expected  to  contribute  to  such  fund  is  given." 
Henderson  v.  London,  etc.,  Insurance  Co.,  135  Ind.  31. 

The  rule  laid  down  in  the  above  case  is  clearly  applicable  to  the 
bill  under  consideration.  Here  the  purpose  to  authorize  cities  to 
make  appropriations  is  expressed  in  the  title,  but  the  purpose  to 
authorize  such  cities  to  levy  a  tax  is  not  expressed  in  the  title,  and 
no  notice  whatever  to  those  who  may  be  expected  to  pay  such  tax 
is  given.  The  title  to  the  bill  relates  solely  to  the  making  of  ap- 
propraitions. 

The  purpose  of  the  bill  is  an  important  one.  Any  law  carrying 
in  it  authority  to  levy  a  tax  upon  the  citizens  is  important,  and 
every  act  having  within  it  such  purpose  should  clearly  set  that 
purpose  out  in  the  title. 

I  believe  the  bill  is  a  meritorious  one.  If  the  title  of  the  bill 
is  amended  and  the  bill  re-enacted,  I  shall  be  glad  to  give  it  ex- 
ecutive approval.  • 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


296 
SENATE  BILL  No.  249. 


FEBRUARY  22,  1907. 

Mr.  President  and  Gentlemen  of  the  Senate: 

I  return  herewith  Senate  Bill  No.  249  without  executive  ap- 
proval. 

The  bill  authorizes  boards  of  school  trustees  in  cities  of  the 
second  class  to  issue,  negotiate  and  sell  bonds  of  the  school  city  or 
corporation,  for  the  purpose  of  procuring  means  "for  school  uses 
and  purposes ;  to  purchase  real  estate ;  to  erect  buildings  and  suit- 
ably equip  them  for  use  for  school  purposes,  including  the  cost  of 
lighting,  heating  and  sanitation;  also  for  the  purpose  of  paying 
any  sums  due  for  buildings  already  erected ;  also  to  fund  and  pay 
any  indebtedness  of  such  school  city  or  corporation" ;  also  to  em- 
power such  trustees  to  levy  and  collect  taxes  for  the  payment  of 
such  bonds. 

The  present  statute,  Section  5915v,  R.  S.  1901,  Vol.  4,  author- 
izes such  boards  to  issue  bonds  for  the  purpose  of  procuring  means 
to  purchase  grounds,  erect  school  buildings  and  pay  for  the  cost 
of  repairing  school  buildings  heretofore  erected,  limiting  such  in- 
debtedness to  two  per  cent,  of  the  taxable  property  of  the  city,  and 
the  tax  levy  for  their  retirement  to  25  cents  on  each  100  dollars  of 
such  taxable  property.  It  further  provides  for  the  submission  of 
the  question  of  issuing  the  bonds  to  the  qualified  voters  of  the  city 
in  case  the  proposed  issue  exceeds  three-fourths  of  one  per  cent,  of 
the  taxable  property  of  the  city. 

The  proposed  bill  repeals  all  laws  in  conflict  with  its  provisions, 
and,  if  enacted,  it  will  strike  down  all  restrictions  in  the  present  law 
limiting  the  authority  of  such  boards  to  issue  bonds  and  to  levy 
taxes  for  their  payment. 

At  present  the  bill  if  enacted  woulS  affect  but  two  cities,  Evans- 
ville  and  Fort  Wayne.  Two  other  cities,  however,  Terre  Haute 
and  South  Bend,  will,  no  doubt,  soon  be  included  among  the  second 
class  cities  of  the  State,  in  which  event  the  bill,  if  enacted,  would 
apply  to  them. 

It  authorizes  boards  of  school  trustees  to  issue  bonds  and  incur 
indebtedness  and  to  levy  taxes  for  the  retirement  of  such  bonds  and 
the  payment  of  such  indebtedness  without  limitation  and  without 
the  submission  of  the  question  in  any  case  to  the  qualified  voters  of 
the  city,  except  the  provision  that  there  shall  not  be  issued  and 


297 

outstanding  at  any  one  time  more  than  $150,000.00  face  value  of 
such  bonds.  It  provides  that  bonds  issued  shall  not  run  for  a 
greater  period  than  ten  years,  and  that  they  shall  fall  due  in  equal 
proportions  each  year  after  their  date  until  the  last  one  matures. 

This  limitation,  however,  is  in  effect  no  limitation  at  all,  since 
any  board  of  trustees  who  desire  might  issue  $150,000.00  of  such 
bonds  to  be  paid  in  any  number  of  years  less  than  ten.  They 
could  all  be  made  payable  in  one  year,  or  they  could  be  extended 
over  a  term  of  two,  three,  four  or  other  number  of  years  not  more 
than  ten;  $150,000.00  of  such  bonds  could  be  issued  today  to  be 
paid  and  retired  in  a  single  year  and  a  tax  levied  to  retire  them, 
or  they  could  be  issued  to  run  a  period  of  three  years,  payable 
one-third  each  year,  and  a  tax  levied  to  retire  them.  If  issued  for  a 
year  and  a  levy  made  to  retire  them,  upon  their  payment  another 
issue  of  $150,000.00  could  be  made  for  another  year,  or  running 
over  a  period  of  two,  three,  four  or  five  years  up  to  ten  years,  as 
the  board  might  elect,  and  a  new  issue  made  upon  their  payment. 

Such  a  power  is  a  dangerous  one  to  confer  upon  the  board  of 
trustees  of  any  school  town.  One  board  might  administer  it  in 
good  faith  and  with  conservative  care ;  the  next  one  might  abuse 
its  power  and  the  people  of  the  city  be  helpless  to  stay  its  hand. 
In  enacting  this  bill  into  law  you  legislate  not  for  today  and  not 
for  existing  boards  of  trustees,  but  for  other  days  and  years  to 
come  and  for  other  boards  of  trustees. 

I  know  of  no  other  statute  upon  this  subject  authorizing  the 
hoards  of  school  trustees  of  any  town  or  city,  great  or  small,  in  all 
the  State  of  Indiana,  to  incur  indebtedness  and  levy  taxes  without 
limitation. 

I  can  not  give  my  approval  to  a  bill  the  terms  of  which  strike 
down  existing  limitations  in  this  regard  and  which  provide  no  re- 
strictions to  take  the  place  of  those  stricken  down. 

The  purpose  of  the  bill,  as  I  am  advised,  is  to  furnish  relief 
to  the  city  of  Evansville,  by  conferring  upon  its  board  of  trustees 
power  to  issue  bonds  to  retire  a  present  indebtedness.  The  relief 
desired  is  essential  to  the  welfare  of  the  schools  of  that  city.  The 
purpose  of  the  bill  is,  therefore,  a  proper  one,  and  if  proper  re- 
strictions were  thrown  around  the  authority  conferred  upon  the 
trustees,  limiting  their  power  to  issue  bonds  and  levy  a  tax  for 
their  retirement,  I  would  approve  it. 

Respectfully  submitted, 

J.  FRANK  HANL.Y, 

Governor. 


298 
SENATE  BILL  No.  128. 


FEBRUARY  26,  1907. 

Mr.  President  and  Gentlemen  of  the  Senate :     . 

I  return  herewith,  without  executive  approval,  Senate  Bill  No. 
128,  the  same  being  "An  act  to  amend  section  15  of  an  act  en- 
titled 'An  act  in  relation  to  voluntary  associations,'  in  force  March 
9,  1901,  Acts  1901,  page  289." 

The  bill  purports  to  amend  an  existing  statute,  but  "there  is  no 
such  act  as  that  named  in  the  title,  to  wit :  "An  act  in  relation  to 
voluntary  associations,"  in  force  March  9,  1901. 

By  reference  to  the  session  laws  of  1901,  page  289,  this  being 
the  book  and  page  referred  to  in  the  title  of  this  bill,  we  find  an 
act  entitled  "An  act  concerning  the  organization  and  perpetuity 
of  voluntary  associations,  repealing  all  laws  in  conflict  therewith, 
legalizing  the  organization  of  certain  associations  organized  un- 
der former  laws,  and  declaring  an  emergency."  This  act  was  ap- 
proved March  9,  1901,  and  in  all  probability  is  the  act  sought  to 
be  amended  by  the  present  measure. 

By  comparison  of  the  two  titles,  that  of  the  amendatory  act 
and  that  of  the  act  sought  to  be  amended,  it  will  be  seen  that  no 
substantial  part  of  the  title  of  the  act  sought  to  be  amended  is  set 
out  in  the  title  of  the  amendatory  act. 

Section  21  of  Article  4  of  the  Constitution,  provides : 

"No  act  shall  ever  be  revised  or  amended  by  mere  reference  to  the  title; 
but  the  act  revised  or  section  amended  shall  be  set  forth  and  published  at  full 
length." 

The  most  that  can  be  said  for  the  present  bill  is  that  it  con- 
tains a  mere  reference  to  the  title  of  the  act  sought  to  be  amended. 
There  is  a  total  failure  to  set  out  the  title. 

In  the  case  of  O'Mara  v.  The  Wabash  Railroad  Company,  150 
Ind.  at  650,  the  title  of  the  amendatory  act  referred  to  the  title 
of  the  act  sought  to  be  amended  as  "being  an  act  concerning  civil 
procedure,"  when  the  actual  title  of  the  act  sought  to  be  amended 
was  "An  act  concerning  proceedings  in  civil  cases." 

In  this  case  the  court  said: 

"The  title  of  the  act  of  1897  seems  to  have  been  possibly  intended  to  apply 
to  either  an  original  or  an  amendatory  act,  but  the  enacting  clause  and  section 
so  clearly  give  the  act  character  as  an  amendatory  act  that  an  intention  to 
enact  an  original  statute  is  not  probable.  We  see  no  escape  from  the  con- 


299 

elusion  that  the  act  does  not  express  the  subject  thereof  in  its  title  by  refer- 
ence to  the  act  or  the  title  of  the  act  to  be  amended.     It  is  therefore  invalid." 
O'Mara  v.  The  Wabash  Railroad  Company,  150,  Ind.  at  650. 

In  another  recent  case  the  title  of  the  amendatory  act  read  as 
follows :  "An  act  to  amend  section  359  of  an  act  concerning  trial 
by  jury,  in  force  September  19,  1881,  the  same  being  Section  525 
of  the  Revised  Statutes  of  1881."  The  actual  title  of  the  act 
sought  to  be  amended  was  "An  act  concerning  proceedings  in 
civil  cases."  The  court  held  the  reference  in  the  title  to  Section 
359  insufficient,  saying: 

"It  will  be  observed  that  the  amendatory  act  of  1891  does  not  refer  to  the 
title  of  the  act  to  be  amended  by  setting  it  out,  as  required  by  said  Section  21 
of  Article  4  of  the  Constitution,  but  refers  to  the  act  to  be  amended  as,  'An 
act  concerning  trial  by  jury,'  which  is  not  the  title  of  the  act  in  which  said 
Section  359,  supra,  may  be  found.  When  the  act  or  section  to  be  amended  is 
identified  in  the  manner  required  by  the  Constitution,  and  it  is  not  certain 
what  act  or  section  was  amended,  the  court  will  resort  to  means  other  than 
the  title  to  determine  what  act  or  section  was  amended.  But  if  the  act  or 
section  is  not  identified  in  the  manner  required  by  the  Constitution,  the  court 
will  not  resort  to  such  other  means  of  identification,  although  the  act  intended 
would  thereby  be  ascertained  beyond  question.  It  follows  that  as  the  title  of 
said  act  of  1891,  supra,  fails  to  identify  the  section  to  be  amended  by  setting 
the  same  out  in  the  title  thereof,  as  required  by  Section  21  of  Article  4  of  the 
Constitution,  the  same  is  unconstitutional  and  void." 

Mankin  v.  Pennsylvania  Co.,  160  Ind.  at  453. 

In  a  yet  more  recent  case  the  title  of  the  amendatory  act  omit- 
ted from  the  title  of  the  act  sought  to  be  amended  the  following 
words:  "Providing  for  town,  city  and  county  boards  of  health, 
prescribing  penalty  for  the  violation  of  the  provisions  thereof." 
The  title  of  the  act  sought  to  be  amended  was  quite  lengthy  and 
was  otherwise  correctly  set  out  in  the  title  of  the  amendatory  act, 
but  the  court  held  the  omission  of  the  words  quoted  to  be  fatal  to 
the  validity  of  the  amendatory  act,  saying : 

"It  is  doubtful  if  this  title  would  be  sufficient  in  an  original  act  to  sup- 
port legislation  concerning  town,  city,  and  county  boards  of  health;  and  it  is 
entirely  clear  that  in  the  office  of  identifying  a  particular  statute  relating  to 
town,  city,  and  county  boards,  for  purpose  of  amendment,  under  Article  4, 
Section  21,  of  the  Constitution,  it  must  be  held  inadequate.  The  absence  of 
the  omitted  words  from  the  title  makes  such  a  radical  restriction  and  change 
in  the  general  import  of  the  title  of  the  act  of  1891  that  we  cannot  attribute 
it  to  a  clerical  error,  as  is  suggested." 

Hendershot  v.  State,  162  Ind.  at  72. 

It  has  been  uniformly  held  by  the  Supreme  Court  of  this  State 
that  two  things  are  required  by  the  Constitution  in  the  amendment 
of  a  section  of  an  act: 


300 

"(1)  The  title  of  the  act  to  be  amended  should  be  referred  to  by  setting 
the  same  out  in  the  title  to  the  amendatory   act;    and    (2)    the   section   as 
amended  should  be  set  forth  and  published  at  full  length." 
Mankin  v.  Pennsylvania  Co.,  160  Ind.  at  453. 

The  failure  of  the  present  bill  to  set  out  in  the  title  any  sub- 
stantial part  of  the  title  of  the  act  sought  to  be  amended,  brings 
it  so  clearly  within  the  inhibition  of  the  Constitution  that  the  ques- 
tion does  not  admit  of  argument.  I  am,  therefore,  compelled  to 
withhold  my  approval. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

SENATE  BILL  No.  227. 


FEBRUARY  27,  1907. 
Mr.  President  and  Gentlemen  of  the  Senate: 

Senate  Bill  No.  227  is  herewith  returned  without  executive  ap- 
proval, because  of  its  defective  title.  It  is  an  amendatory  act.  It 
fails  to  correctly  set  out,  either  in  the  title  or  in  the  body  of  the 
bill,  the  title  of  the  act  it  seeks  to  amend.  It  is  therefore  invalid. 

In  support  of  this  position  I  beg  to  call  attention  to  the  au- 
thorities cited  in  the  Executive  message  filed  yesterday  relating  to 
Senate  Bill  No.  126.  I  believe  the  authorities  there  cited  to  be 
conclusive  of  this  question. 

The  purposes  of  the  bill  are  important  and  entirely  proper 
and  I  am  in  full  sympathy  therewith.     I  beg,  therefore,  to  urge  the 
preparation  and  passage  of  a  new  and  corrected  bill. 
Respectfully  submitted, 

J.  FRANK  HANL.Y, 

Governor. 


301 
SENATE  BILL  No.  61, 


FEBRUARY  27,  1907. 

Mr.  President  and  Gentlemen  of  the  Senate: 

Senate  Bill  No.  61,  a  bill  "declaring  the  lien  of  all  taxes  upon 
real  estate  and  limitation  of  said  lien,"  is  returned  herewith  with- 
out executive  approval. 

The  effect  of  the  bill,  if  it  became  a  law,  would  be  to  divest 
real  estate  of  all  liens  on  account  of  taxes  after  ten  years.  Under 
existing  law  taxes  are  a  lien  upon  real  estate  until  paid.  Such 
lien  can  be  released  only  by  payment. 

I  am  thoroughly  convinced  of  the  necessity  of  the  law  as  it  is, 
and  am  unable  to  conceive  of  any  ligitimate  reason  why  the  lien  of 
the  State  for  taxes  should  ever  be  divested  except  by  payment.  To 
do  so  would  be  to  put  a  premium  upon  the  evasion  of  the  payment 
of  taxes.  It  would  be  unfair  to  the  State  and  unfair  to  every  citi- 
zen who  pays  his  taxes  without  evasion  or  delay.  The  man  who 
owns  property,  who  receives  the  benefits  of  organized  government 
and  the  protection  of  its  laws,  and  who  accepts  the  privileges  of 
citizenship,  owes  it  to  the  State  to  pay  all  taxes  lawfully  levied. 
The  fact  that  he  has  escaped  such  payment  for  ten  years,  either 
through  his  own  connivance  or  the  neglect  of  the  public  officials 
through  whom  the  State  alone  can  act,  is  an  insufficient  reason  for 
divesting  the  real  estate  he  owns,  of  liability.  On  the  contrary,  it 
is  a  cogent  reason  why  the  lien  of  the  State  should  continue  until 
actual  payment  is  made.  It  will  not  do  to  say  that  such  lien  en- 
cumbers such  person's  real  estate  and  hinders  the  sale  thereof,  for 
all  this  can  be  removed  by  the  payment  of  the  taxes  which  con- 
stitute the  lien.  The  equality  of  taxation  enjoined  by  the  Con- 
stitution, the  protection  of  the  State's  revenues,  and  the  orderly 
and  honest  administration  of  its  taxing  laws  preclude  the  Execu- 
tive from  giving  his  assent  to  this  measure,  and  I  venture  to  ex- 
press the  hope  that  these  considerations  are  of  such,  weight  as  to 
preclude  the  members  of  the  General  Assembly,  upon  further 
thought,  from  insisting  upon  its  enactment. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


302 
SENATE  BILL  No.  89. 

MARCH  9,  1907. 
Mr.  President  and  Gentlemen  of  the  Senate: 

Senate  Bill  No.  89,  a  bill  concerning  life  insurance,  is  hereby  re- 
turned without  executive  approval.  The  bad  in  it  so  far  out- 
weighs the  good  that  I  can  not  give  my  assent  to  its  enactment. 

Early  in  the  present  administration  events  which  are  now  fa- 
miliar to  all,  and  which  I  need  not  again  detail,  culminated  in  the 
enforced  resignation  of  the  Auditor  of  State  and  in  an  investiga- 
tion of  the  affairs  of  the  office  of  Auditor  of  State  by  a  non-parti- 
san commission,  of  high  character  and  ability,  appointed  by  the 
Executive.  The  work  of  this  commission  exposed  a  condition 
which  startled  and  aroused  the  people  of  the  entire  State,  and 
which  justified  a  further  examination  of  the  insurance  department 
of  that  office  in  its  relations  to  and  dealings  with  insurance  affairs. 

When  the  dominant  political  party  of  the  State  held  its  State 
convention  last  April  the  investigation  of  this  department,  though 
not  then  finished,  had  proceeded  far  enough  to  make  it  morally 
certain  to  the  Executive  and  those  familiar  with  the  work  of  the 
commission  that  certain  Indiana  life  insurance  companies  were 
mismanaging  their  affairs  and  systematically  plundering  their 
policy  holders.  These  facts  were  such  as  to  impress  the  repre- 
sentatives of  that  party,  assembled  in  convention,  with  the  need 
of  additional  insurance  legislation,  having  for  its  purpose  the 
reformation  of  the  abuses  then  in  practice.  With  this  knowledge 
before  it  the  convention  made  the  following  pledge  to  the  people 
of  the  State : 

"We  are  in  favor  of  a  law  to  further  regulate  the  business  of  life  insur- 
ance companies,  the  organization  and  business  of  fraternal  benefit  societies, 
mutual  benefit  associations  and  investment  companies,  both  foreign  and  do- 
mestic, for  the  purpose  of  better  protecting  the  policy  holders  therein.  A 
law  should  be  enacted  that  will  designate  and  more  closely  restrict  the  kind 
and  character  of  securities  that  may  be  deposited  with  the  Auditor  of  State, 
limit  the  expense  of  such  companies,  societies  and  associations,  and  provide 
for  complete  publicity  of  their  affairs." 

The  convention  adjourned.  The  delegates  thereof  returned 
to  their  homes,  and  the  people  of  the  State  were  given  to  under- 
stand that  the  party,  if  successful  at  the  polls,  would  redeem  the 
pledge  made. 

Events  of  the  preceding  two  years  had  been  such  as  to  center 
the  campaign  which  followed  upon  the  State  administration.  Na- 


303 

tional  issues  were  but  incidental.  It  was  stated  by  all,  friends  and 
foes  alike,  that  the  party  would  necessarily  stand  or  fall  upon  the 
record  made,  upon  the  things  done,  and  the  things  promised  to  be 
done  by  the  State  administration.  By  the  time  the  campaign  really 
opened  the  work  of  the  investigating  committee  was  completed  and 
the  facts  laid  before  the  people. 

The  condition  in  relation  to  life  insurance  revealed  by  the  re- 
port of  the  committee  was  unusual  and  startling.  Certain  recom- 
mendations, having  for  their  purpose  the  accomplishment  of  the 
things  pledged  to  the  people  by  the  dominant  party  in  its  plat- 
form, were  made  by  the  commission.  Believing  in  the  good  faith, 
integrity  and  ability  of  the  gentlemen  who  composed  that  commis- 
sion, and  knowing  the  care  with  which  they  had  made  the  investi- 
gation and  the  long  and  sincere  consideration  they  had  given  to 
the  subject  of  insurance,  the  Executive  took  up  these  recommen- 
dations and  presented  them  to  the  people  of  the  State  in  connec- 
tion with  a  frank  and  full  discussion  of  insurance  conditions  from 
more  than  half  a  hundred  platforms. 

One  of  the  things,  and,  in  my  judgment,  the  first  and  most 
essential  thing,  recommended  by  the  committee  was  the  establish- 
ment of  a  separate  insurance  department  to  be  administered  by 
an  insurance  commissioner  who  should  be  appointed  by  the  Ex- 
ecutive. That  was  logically  and  necessarily  the  first  step  toward 
reformation.  The  department  in  all  its  history  had  never  been 
more  than  a  neglected  adjunct  in  the  office  of  the  Auditor.  With 
a  single  exception,  no  Auditor  in  twenty  years  had  been  qualified 
to  administer  the  insurance  department,  and  with  the  same  excep- 
tion no  one  who  had  held  the  office  in  twenty  years  had  adminis- 
tered the  department  with  good  faith  or  integrity.  Throughout  all 
the  discussion,  from  the  beginning  to  the  end  of  the  campaign,  the 
people  were  assured  that  if  a  legislature  were  elected  the  majority 
of  which  should  be  composed  of  members  of  the  dominant  party  a 
separate  department  of  insurance  would  be  established. 

The  present  Auditor  of  State  and  many  other  of  the  present 
State  officers  were  candidates  before  the  people  for  election.  They 
attended  many  of  these  public  meetings,  heard  the  pledge  made 
in  their  behalf,  applauded  its  utterance  and  gave  the  people  to 
understand  that  they  were  in  accord  therewith.  In  many  instances 
the  Executive  was  appealed  to  by  gentlemen  now  members  of  this 
General  Assembly,  and  then  candidates  for  election,  to  come  into 
their  districts  and  make  the  pledge  in  their  behalf  to  their  people. 

The  election  was  won  by  a  most  substantial  plurality,  largely, 


304 

I  am  compelled  to  believe,  upon  the  issue  raised  and  the  promises 
made  in  this  behalf.  They  were  made  by  the  Executive  in  good 
faith.  He  supposed  the  pledge  was  intended  to  be  redeemed. 
Therefore,  after  further  and  most  careful  consideration  of  the 
rights  of  all  the  interested  parties — insurance  companies  and  pol- 
icy holders — he  recommended  to  this  Assembly  legislation  which 
would  have  redeemed  that  pledge.  Today,  on  the  eve  of  your 
adjournment,  he  is  compelled  to  say  to  you  and  to  the  people  of 
the  State,  "The  pledge  is  broken ;  faith  has  not  been  kept." 

The  bill  I  return  to  you  provides  for  a  department  of  insur- 
ance, but  leaves  it  still  an  adjunct  in  the  office  of  the  Auditor  of 
State,  to  be  presided  over  nominally  by  the  Auditor,  but  actually 
by  a  deputy  with  a  salary  so  inconsequential  as  to  preclude  the 
securing  of  the  services  of  a  man  calculated  either  by  knowledge  or 
experience  to  administer  its  affairs.  The  expense  of  the  department 
will  be  fully  $15,000  a  year,  but  it  will  be  administered  in  the  same 
old  way,  with  the  same  neglect,  the  same  lack  of  initiative  that  has 
characterized  its  administration  through  former  years.  It  is  left 
to  be  the  football  of  politics,  its  deputyships  to  be  prizes  to  be 
handed  out  every  two  years  by  the  successful  nominee  of  the  domi- 
nant party  as  a  reward  for  personal  political  services. 

A  section  of  the  bill  requires  an  annual  report  to  the  Governor, 
but  it  gives  him  no  power  or  authority  to  correct  or  to  require  the 
correction  of  any  abuse  disclosed.  In  this  regard  the  bill  utterly 
fails  to  keep  the  party's  pledge.  The  department  was  retained  as 
a  bureau  in  the  office  of  the  Auditor  of  State  at  the  behest  and  upon 
the  orders  of  the  very  men  whose  acts  it  is  the  duty  of  the  com- 
missioner to  investigate  and  supervise,  and  this,  too,  in  the  face  of 
the  fact  that  the  deeds  of  a  number  of  these  men  then  being  ex- 
posed wrere  such  as  to  shame  the  State  and  bring  reproach  upon 
every  insurance  company  in  the  Commonwealth. 

Our  pledge  was :  "A  law  shall  be  enacted  that  will  designate 
and  more  closely  restrict  the  kind  and  character  of  securities  that 
may  be  deposited  with  the  Auditor  of  State."  The  hour  of  legis- 
lation has  gone  by,  and  that  pledge  is  not  redeemed.  The  terms 
of  our  bond  also  ran :  "A  law  shall  be  enacted  that  will  limit  the 
expense  of  such, companies,  societies  and  associations."  The  day  of 
adjournment  is  upon  us,  and  that  pledge  is  also  unredeemed.  The 
legislation  you  have  passed,  instead  of  providing  for  the  limitation 
"of  the  expense  of  such  companies,  societies  and  associations,"  pro- 
vides with  scrupulous  care  that  the  commissioner  shall  have  no 
power  to  supervise  or  correct  abuses  which  are  the  offspring  of  ex- 


305 

isting  unwise,  and  in  many  instances,  unfair  and  fraudulent  con- 
tracts. It  is  carefully  provided,  "That  nothing  in  this  act  shall  be 
construed  to  interfere  in  any  manner  with  the  execution,  carrying 
out  and  fulfillment  of  the  contracts  of  life  insurance  companies  ex- 
ecuted prior  to  the  taking  effect  of  this  act." 

What  are  these  contracts  that  are  so  carefully  preserved  from 
supervision?  They  are  special  contracts  made  with  favored  policy 
holders,  prominent  personages  of  the  different  communities  of  the 
Commonwealth,  in  some  instances  State  officers  and  members  of  the 
General  Assembly — contracts  which,  in  1905,  cost  the  State  Life 
Insurance  Company  $136,523.84,  and  in  1906,  $179,299.72,  for 
which  it  received  no  service  or  thing  of  value.  In  this  connection 
it  is  well  to  remember  that  from  89  per  cent,  to  98  per  cent.,  and 
in  some  instances  100  per  cent,  of  all  the  insurance  written  by 
some  of  the  Indiana  companies  is  of  this  character. 

What  are  these  contracts  that  are  so  carefully  preserved  ?  They 
are  contracts  with  agency  companies  organized  as  "go  betweens" 
between  the  insurance  companies,  their  policy  holders  and  the  pub- 
lic, the  terms  of  which  are  extortionate,  and,  in  some  instances,  ac- 
tually fraudulent.  Every  moral  and  prudential  reason  requires 
that  an  insurance  company  should  retain  direct  conteol  of  its 
own  agents ;  that  there  should  be  direct  responsibilty  of  the  agency 
force  to  the  company  itself,  and  that  the  company  should  be  in  a 
position  to  exercise  the  closest  supervision  over  the  work  of  its 
agents.  Under  the  contracts  so  carefully  preserved  by  this  bill  the 
agency  force  of  every  company  is  responsible  to  the  agency  com- 
pany alone.  The  officers  of  the  insurance  companies  are  relieved 
from  the  work  and  responsibility  of  obtaining  business.  They  are 
contracts  which  in  many  instances  provide  for  the  payment  of  80 
and  90  per  cent,  of  the  first  premiums  to  the  agency  company,  and 
for  the  payment  of  71//>  to  11  per  cent,  of  all  subsequent  renewal 
premiums  on  the  insurance  written  by  such  companies,  and  in  one 
instance  of  71/>  per  cent,  of  all  renewal  premiums  upon  the  busi- 
ness in  force  within  certain  territory,  composed  of  large  and  popu- 
lous States,  written  prior  to  the  organization  of  the  company  or 
the  execution  of  the  contract.  Every  such  company  is  an  open 
door  to  extravagance  and  fraud,  and  you  were  not  wanting  of  evi- 
dence of  this  fact.  A  striking  example  was  being  laid  bare,  under 
executive  direction,  beneath  the  roof  of  this  Capitol,  even  while 
you  were  passing  the  present  emasculated  and  sexless  measure. 

As  before  suggested,  our  pledge  to  the  people  ran:  "A  law 
shall  be  enacted  that  will  limit  the  expense  of  such  companies,  so- 
[20—19891] 


306 

cieties  and  associations."  But  all  power  of  the  commissioner  to 
supervise  or  limit  salaries  is  absent  from  the  measure  you  have  ten- 
dered the  people.  It  is  said,  in  justification,  that  the  question  of 
salaries  of  mutual  life  insurance  companies  is  one  for  the  policy 
holders  of  the  company  and  not  one  with  which  the  State  may  prop- 
erly concern  itself.  This  position,  however,  is  untenable.  A  mu- 
tual insurance  company  is  in  the  nature  of  a  partnership.  Profits 
and  losses  are  to  be  shared  alike  by  all  their  policy  holders.  There- 
fore, every  policy  holder  has  a  direct  and  vital  interest  in  the  cost 
of  the  administration  of  the  affairs  of  the  company.  It  is  not 
enough  to  say  that  if  the  individual  policy  holder  is  dissatisfied  with 
extravagance  and  peculation  in  administration  he  may  elect  new 
officers  or  bring  suit  to  restrain  further  dissipation  of  the  com- 
pany's funds.  Every  thoughtful  man  knows  this  to  be  impractica- 
ble. The  policy  holders  of  these  companies,  in  many  instances,  are 
men  of  limited  means.  They  are  widely  scattered  throughout  many 
States.  They  do  not  know,  and  in  many  instances  have  no  means 
of  knowing,  the  character  of  the  administration.  In  every 
such  instance  it  is  the  duty  of  the  State  to  intervene.  It  has  the 
legal  power  to  intervene,  and  common  justice  and  the  welfare  of 
the  people  impose  upon  it  the  obligation  to  do  so. 

An  instance  of  this  character  well  in  point  is  afforded  by  the 
savings  banks  of  the  State.  Under  the  law  all  savings  banks  are 
mutual.  The  profits  made  belong  to  the  depositors.  There  is  no 
capital  stock.  The  depositors  are,  in  many  instances,  people  of 
small  means,  who  save  by  mites,  little  by  little.  That  these  de- 
positors may  be  protected,  the  law  of  the  State,  since  March  7, 
1873,  has  limited  the  salaries  of  the  trustees  and  officers  of  every 
savings  bank  in  the  State.  The  reasons  for  the  intervention  of 
the  State  in  limiting  the  salaries  and  expenses  of  the  administra- 
tion of  mutual  life  insurance  companies  are  stronger  and  more  nu- 
merous than  in  case  of  savings  banks.  Their  policy  holders  are 
far  greater  in  number  and  more  widely  scattered  in  residence  than 
are  the  depositors  of  savings  banks,  and  have  less  opportunity  to 
know  the  character  of  the  administration  of  the  companies.  A 
savings  bank  operates  within  narrow  limitations  as  to  territory  and 
patronage.  An  insurance  company  operates  throughout  the  State, 
throughout  the  "country .' 

You  were  tendered  a  measure  giving  the  commissioner  power 
to  supervise  these  expenses.  You  struck  it  down.  You  took  out  of 
this  bill  every  provision  giving  the  commissioner  authority  of  this 


307 

character.  And  this,  too,  at  a  time  when  you  were  being  told  by 
confessions  wrung  from  the  officers  of  a  life  insurance  company,  on 
the  witness  stand,  under  oath,  that  they  for  years  had  been  draw- 
ing double,  triple  and  sometimes  quadruple  salaries,  aggregating 
in  some  instances  more  than  $20,000  annually ;  at  a  time  when  you 
were  being  told  by  men  on  the  witness  stand,  under  oath,  and  at 
whose  behest  you  struck  out  of  the  measure  the  provision  author- 
izing the  supervision  of  salaries  and  expenses  of  the  administration 
of  such  companies,  that  they,  in  eight  years,  had  drawn  severally 
$116,660.25,  $118,870,  $117,852  and  $78,809  in  the  way  of  sal- 
aries and  compensations,  and  that  together  they  had  drawn  in 
eight  years,  almost  a  half  million  dollars  in  this  way. 

Our  pledge  was -to  limit  the  expenses  of  the  administration  of 
these  companies.  In  answer  you  tender  a  measure  which  has  no 
limitation  whatever  upon  administrative  expenditures  and  which 
leaves  open  every  door  to  extravagant  salaries,  extortionate  con- 
tracts and  fraudulent  bargains  by  which  the  treasuries  of  Indiana 
companies  have  been  depleted.  By  its  enactment  you  break  the 
pledge  of  a  great  party  whose  glory  has  been  its  redemption  of 
the  pledges  made ;  break  faith  with  the  people  whose  rights  are 
profoundly  involved,  and  betray  the  interests  of  the  widow  and 
the  orphan.  To  do  this  you  turned  down  the  recommendations 
of  the  commission  which  investigated  the  wThole  question  with  care 
and  painstaking  industry,  executive  suggestion  oft  repeated  and 
insisted  upon,  and  the  report  of  your  own  committees,  whose  mem- 
bers had  given  the  subject  every  consideration  possible  for  many 
weeks. 

No  man  in  either  chamber  of  this  General  Assembly  more  great- 
ly desires  effective  legislation  than  I.  No  man  has  contributed 
more  to  that  end,  in  proportion  to  his  ability,  than  I  have  done. 
From  the  date  the  investigation  of  this  question  was  begun  to  this 
good  hour  I  have  stood  for  such  legislation,  for  the  redemption  of 
the  party  pledge  and  for  the  protection  of  the  thousands  of  men 
and  women  who  own  policies  in  these  companies.  I  can  not  now 
persuade  myself  that  it  is  either  wise  or  honest  to  sign  this  written 
evidence  of  broken  faith. 

As  for  myself,  I  prefer  th.it  the  bond  be  returned  to  the  people 
unfulfilled  rather  than  to  become  a  party  to  the  enactment  of  a 
measure  which  is  in  itself  a  false  pretense,  whose  purpose  is  to  de- 
ceive and  whose  only  service  will  be  to  furnish  cover  for  the  further 
plundering  of  the  people.  I  believe  it  wiser  and  fairer  to  go  back 


308 

to  them,  confess  our  failure  and  ask  another  letter  of  direction, 
than  to  seek  to  deceive  them  with  the  pending  measure. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


SENATE  BILL  No.  298. 

MARCH  9,  1907. 
Mr.  President  and  Gentlemen  of  the  Senate: 

I  return  herewith,  without  my  approval,  Senate  Bill  No.  298, 
the  same  being  a  bill  concerning  sewers  and  drains  in  cities  having 
a  population  of  more  than  16,000  and  less  than  20,000. 

The  bill  in  substance  provides  that  all  cities  in  this  State  hav- 
ing a  population  of  not  less  than  16,000  and  not  more  than  20,000, 
which  shall  have  built  a  sewer  or  drain  under  any  past,  present  or 
future  law,  and  which  shall  be  unable,  for  any  reason,  to  pay  its 
assessment,  then,  under  the  bill,  the  title  to  the  sewer,  as  against  the 
city,  shall  vest  in  the  contractor,  and  that  any  such  city  shall  have 
the  power  to  grant  a  franchise  to  such  contractor  to  operate  the 
drain  or  sewer  in  the  streets  and  alleys  of  the  city ;  and  that  the 
city  shall  have  power  by  contract  to  lease  the  sewer  or  drain,  or 
otherwise  provide  for  the  use  of  the  sewer  or  drain  by  the  city  "for 
the  drainage  of  its  streets,  alleys  and  public  grounds  and  other 
municipal  purposes,  upon  such  terms  as  may  be  agreed  upon  be- 
tween such  city  and  such  contractor." 

The  bill  is  clearly  within  the  inhibition  of  Section  68,  Article  1 , 
of  the  Constitution,  forbidding  the  General  Assembly  to  grant  to 
any  citizen  or  class  of  citizens  privileges  or  immunities  which  upon 
the  same  terms  shall  not  equally  belong  to  all  citizens.  It  pro- 
vides for  an  arbitrary  classification  of  cities  and  confers  upon 
those  within  that  class  privileges  denied  to  other  cities  similarly 
situated.  The  classification  created  is  of  cities  having  a  population 
of  not  less  than  16,000  nor  more  than  20,000  inhabitants,  and  can 
apply  only  to  the  cities  of  Lafayette,  Logansport,  Marion  and 
Richmond. 

The  well  settled  rule  of  construction  in  this  State  is  that  where 
the  Legislature  undertakes  to  classify  the  objects  or  subjects  upon 
or  against  which  legislation  shall  operate,  the  classification  must 
be  natural  and  reasonable  and  must  inhere  in  the  subject  matter 
thereof. 


309 

The  last  utterance  of  our  Supreme  Court  upon  this  subject  was 
handed  down  by  Monks,  Judge,  in  Case  No.  20,849,  the  Bedford 
Quarries  Co.  v.  Martin  S.  Bough,  on  March  1,  1907.  In  that  case 
the  court  says : 

"The  Legislature  may  make  classification  for  legislative  purposes,  but  it 
must  have  some  reasonable  basis  upon  which  to  stand.  It  is  evident  that  the 
differences  which  would  serve  for  a  classification  for  some  purposes  would 
furnish  no  reason  for  a  classification  for  legislative  purposes.  Such  legisla- 
tion must  not  only  operate  equally  upon  all  within  the  class,  but  the  classi- 
fication must  furnish  a  reason  for  and  justify  the  making  of  the  class;  that 
is,  the  reason  for  the  classification  must  inhere  in  the  subject-matter  and  rest 
upon  some  reason  which  is  natural  and  substantial,  and  not  artificial.  Not 
only  must  the  classification  treat  all  brought  under  its  influence  alike,  under 
the  same  conditions,  but  it  must  embrace  all  of  the  classes  to  which  it  is 
naturally  related.  Neither  mere  isolation  nor  arbitrary  selection  is  proper 
classification." 

Dickson  v.  Poe,  159  Ind.  492; 

School  City  of  Rushville  v.  Hayes,  162  Ind.  200; 

Street  v.  Barney  Elec.  Supply  Co.,  160  Ind.  338; 

Town  of  Longveiw  v.  City  of  Crawfordsville,  164  Ind.  671 ; 

McKinster  v.  Sager,  163  Ind.  671; 

Sellers  v.  Hayes,  163  Ind.  422. 

In  School  City  of  Rushville  v.  Hayes  (cited  above),  our  Su- 
preme Court  quotes  with  approval  from  the  Supreme  Court  of 
New  Jersey,  as  follows : 

"There  must  be  substantial  distinction  having  a  reference  to  the  subject- 
matter  of  the  proposed  legislation  between  the  objects  or  places  excluded. 
The  marks  of  distinction  upon  which  the  classification  is  founded  must  be  such, 
in  the  nature  of  things,  as  to  in  some  reasonable  degree,  at  least,  justify  or 
account  for  the  restriction  in  the  legislation." 

In  the  case  of  the  Town  of  Longview  v.  City  of  Crawfordsville 
(cited  above),  our  Supreme  Court  quotes  with  approval  from  the 
Supreme  Court  of  New  Jersey,  as  follows : 

"The  rule  is  that  in  any  classification  for  the  purpose  of  a  general  law, 
all  must  be  included  and  made  subject  to  it,  none  omitted  that  stand  upon  the 
same  footing  regarding  the  subject  of  legislation." 

And  quoting  again  from  the  same  court,  the  following  lan- 
guage is  approved : 

"Interdicted  local  and  special  laws  are  all  those  that  rest  upon  a  false  or 
defective  classification.  Their  vice  is  that  they  do  not  embrace  all  the  classes 
to  which  they  are  naturally  related;  they  create  preferences  and  establish 
inequalities;  they  apply  to  persons,  things  or  places  possessed  of  certain  quali- 
ties or  situations,  and  exclude  from  their  effect  other  persons,  things  or  places 
which  are  not  dissimilar  in  these  respects." 


310 

The  difference  of  4,000  in  population,  or  the  maximum  limit  of 
20,000,  or  the  minimum  limit  of  16,000,  bears  no  relation  whatever 
to  the  subject  of  legislation  contained  in  this  proposed  act,  and 
under  the  authorities  cited  and  the  uniform  rule  of  construction 
throughout  the  entire  country,  the  proposed  law  is  invalid  under 
our  Constitution. 

In  addition  to  the  fact  that  the  proposed  law  is  special  legisla- 
tion, and  for  that  reason  unconstitutional,  the  bill  is  subject  to 
criticism  on  account  of  the  fact  that  it  seeks  to  provide  a  means 
whereby  other  provisions  of  the  Constitution  of  the  State  may  be 
evaded.  Section  1,  of  Article  XIII,  of  the  Constitution  of  the 
State,  prohibits  municipal  corporations  from  incurring  an  indebt- 
edness in  excess  of  two  per  centum  of  the  value  of  its  taxable  prop- 
erty, and  it  is  a  fact,  well  known  in  connection  with  this  proposed 
legislation,  that  the  city  of  Longansport,  undertaking  to  proceed 
under  the  laws  of  the  State  for  the  construction  of  sewers,  over- 
reached its  authority  under  the  Constitution  to  incur  debts,  and  on 
account  thereof  was  unable  to  pay  the  assessments  properly  charge- 
able to  the  city  on  account  of  the  construction  of  sewers.  And  now 
it  is  proposed  by  this  bill  to  give  to  the  contractor,  who  knowingly 
entered  into  an  invalid  contract — one  which  could  not  be  enforced 
— all  the  right  and  title  which  the  city  would  otherwise  have  in 
the  sewer  contracted  for,  and  to  authorize  the  city  to  grant  to  the 
contractor  a  franchise  to  operate  the  sewer  upon  the  streets  and 
alleys  and  public  places  of  the  city,  and  to  authorize  the  city  to 
lease  the  same  from  the  contractor.  The  purpose  of  the  bill  cannot 
be  other  than  to  give  to  the  municipality  the  right  to  grant  the 
franchise  and  to  enter  into  a  contract  for  the  lease  of  the  sewer, 
which  would  eventually  pay  the  debt  which  is  now  condemned  by 
the  Constitution.  It  has  repeatedly  been  held  by  the  Supreme 
Court  that  cunningly  devised  schemes  of  this  sort  will  not  meet 
with  judicial  approval,  although  they  may  meet  with  the  approval 
of  the  General  Assembly. 

In  the  case  of  Voss  v.  Waterloo  Water  Company,  163  Ind.  89, 
the  Supreme  Court  of  our  State,  in  speaking  of  the  authority  of 
the  town  to  grant  a  franchise  to  a  water  company  to  construct  a 
water  plant,  and  for  the  town  to  lease  the  same  or  pay  water  rents 
in  such  manner  as  to  liquidate  the  indebtedness  created  for  the 
purpose  of  constructing  the  plant,  in  a  case  where  the  town  itself 
could  not,  on  account  of  constitutional  limitations,  construct  and 
own  the  plant,  uses  these  words : 


311 

"The  Waterloo  Water  Company  is  merely  a  dummy  corporation,  owned 
by  the  town,  but  making  contracts  and  incurring  liabilities  which  it  is  ad- 
mitted the  town  cannot  make  or  incur  in  its  own  name  without  violating  the 
provisions  of  the  Constitution  restricting  its  power  to  become  indebted.  In 
other  words,  the  town  is  attempting  to  do  by  a  corporation  practically  owned 
by  it  what  it  has  no  power  to  do,  and  is  prohibited  from  doing.  Said  arrange- 
ment is  a  palpable  violation  of  said  Article  13  of  the  Constitution,  for  what 
a  town  cannot  do  directly  it  cannot  do  indirectly  through  a  dummy  corpora- 
tion controlled  and  practically  owned  by  it.  The  Constitution  cannot  be 
evaded  in  this  manner.  'It  is  the  duty  of  the  judge  to  make  such 

construction  as  shall  suppress  all  evasions  for  the  continuance  of  the  mischief. 
To  carry  out  eifectually  the  object  of  a  statute,  it  must  be  so  construed  as  to 
defeat  all  attempts  to  do  or  avoid  in  an  indirect  or  circuitous  manner  that 
which  it  has  prohibited  or  enjoined.  When  the  acts  of  the  parties 

are  adopted  for  the  purpose  of  effecting  a  thing  which  is  prohibited,  the  parties 
have  done  that  which  they  have  purposely  caused,  though  they  may  have  done 
it  indirectly.  When  the  thing  done  is  substantially  that  which  was  prohibited, 
it  falls  within  the  act,  simply  because,  according  to  the  true  construction 
of  the  statute,  it  is  the  thing  thereby  prohibited.  Whenever  courts  see  such 
attempts  at  concealment,  'they  brush  away  the  cobweb  varnish,'  and  show  the 
transaction  in  its  true  light.  They  see  things  as  ordinary  men  do,  and  see 
through  them.  Whatever  might  be  the  form  or  color  of  the  transaction,  the 
law  looks  to  the  substance  of  it.  In  all  such  cases  it  is,  in  truth,  rather  the 
particular  transaction  than  the  statute  which  is  the  subject  of  construction; 
and  if  it  is  found  to  be  in  substance  within  the  statute,  it  is  not  suffered  to 
escape  from  the  operation  of  the  law  by  means  of  the  disguise  under  which 
its  real  character  is  masked." 

In  addition  to  the  constitutional  objects  above  noted,  the  pro- 
posed act  is  ill-advised  and  dangerous  for  many  reasons  and  should 
not  meet  with  executive  approval,  even  though  it  might  be  valid 
if  enacted.  The  bill  provides  that  the  title  to  the  sewer  shall  vest 
in  the  contractor,  and  that  a  franchise  may  be  granted  to  the  con- 
tractor, and  that  the  town  may  enter  into  a  lease  of  the  sewer  with 
the  contractor.  It  will  be  observed  that  there  are  no  restrictions  or 
limitations  whatever  in  the  proposed  act  to  safeguard  the  public 
interests.  A  designing  contractor  might  agree  with  the  municipal 
authorities  to  construct  a  sewer  for  a  much  less  price  than  for 
which  any  other  individual  would  be  willing  to  perform  the  work, 
knowing  that  under  this  law  the  city,  not  being  able  to  pay  for  its 
proportion  of  the  assessment,  would  be  divested  of  all  interest  in 
the  sewer  when  constructed,  and  that  it  would  be  compelled  to 
grant  him  a  franchise  and  enter  into  a  contract  with  him  for  its 
lease.  There  is  no  provision  in  the  proposed  law  as  to  how  long 
the  title  to  the  sewer  shall  remain  in  the  contractor,  nor  is  there  any 
provision  whereby  at  any  subsequent  time  the  city  may  acquire 


312 

ownership  in  the  property.  Neither  is  there  any  provision  in  the 
bill  as  to  what  length  of  time  the  city  may  grant  a  franchise  for 
its  operation  and  use  by  the  contractor,  or  for  what  length  of  time 
the  city  may  enter  into  a  contract  for  its  use.  In  short,  by  the 
terms  of  the  bill  the  man  who  builds  a  sewer  under  a  void  contract 
acquires  a  monopoly  of  sewer  rights  in  the  streets  and  alleys  of 
the  city  where  the  sewer  is  constructed.  By  virtue  of  this  bill  he 
becomes  master  of  the  situation.  The  sewer  belongs  to  him.  There 
can  be  no  competition  in  granting  the  franchise;  no  competition 
in  entering  into  the  lease  for  its  use.  A  franchise  granted  for  the 
use  of  the  sewer  constructed  by  virtue  of  this  bill,  or  a  lease  en- 
tered into  for  the  use  of  a  sewer  constructed  by  virtue  of  this  bill, 
could  be  perpetual,  without  any  power  or  authority  in  the  munici- 
pality to  get  clear  of  the  obligation  or  resume  its  functions  as  a 
municipal  government. 

While  our  Supreme  Court  may  have  never  held  that  a  perpetual 
franchise  granted  by  a  municipal  government  in  this  State  is  void, 
or  that  an  exclusive  privilege  granted  by  a  municipal  government 
to  a  citizen  under  legislative  sanction  to  exercise  authority  over  the 
streets  and  alleys  of  the  city  is  void,  I  am  unwilling  to  agree  that  it 
is  advisable  that  the  Legislature  should  approve,  at  this  time,  any 
legislation  which  places  a  municipality  of  the  State  in  the  hands  of 
a  single  individual,  as  this  bill  attempts  to  do. 

The  Supreme  Court  of  the  United  States,  in  New  Orleans  Gas 
Company  v.  Louisiana  Light  Company,  115  U.  S.,  page  667, 
quotes  the  following  language  with  approval : 

"No  Legislature  can  bargain  away  the  public  health  or  public  morals. 
The  people  themselves  cannot  do  it,  much  less  their  servants.  The  supervision 
of  both  these  subjects  of  governmental  power  is  continuing  in  its  nature  and 
tney  are  to  be  dealt  with  as  the  special  exigencies  of  the  moment  may  require. 
Government  is  organized  with  a  view  to  their  preservation  and  it  cannot  divest 
itself  of  the  power  to  provide  for  them.  For  this  purpose  the  largest  legisla- 
tive discretion  is  allowed,  as  the  discretion  cannot  be  parted  with  any  more 
than  the  power  itself." 

In  speaking  of  this  general  subject,  Cooley,  Judge,  in  the  case 
of  Gale  v.  Kalamazoo,  23d  Mich.  344,  says : 

"If  a  municipal  corporation  can  preclude  itself  in  this  manner  from  estab- 
lishing markets  whenever  they  may  be  thought  desirable  or  abolishing  them 
when  thought  undesirable,  it  must  have  the  right  also  to  agree  that  it  will  not 
open  streets  or  grade  or  pave  such  as  are  open  or  introduce  water  for  the  sup- 
ply of  its  citizens  except  from  some  specified  source,  or  buy  fire  engines  of 
any  other  than  some  stipulated  kind,  OF  contract  for  any  public  work  except 
with  persons  named;  and  if  it  might  do  these  things  it  is  easy  to  perceive  that 


313 

it  might  not  be  long  before  the  incorporation  itself,  instead  of  being  a  con- 
venience to  its  citizens,  would  have  been  used  in  various  ways  to  compel  them 
to  submit  to  innumerable  inconveniences  and  would  itself  constitute  a  public 
nuisance  of  the  most  serious  and  troublesome  description.  Individual  citizens 
looking  only  to  the  furtherance  of  their  private  interest,  might,  in  various  di- 
rections, engage  it  in  permanent  contracts,  which,  while  ostensibly  for  the 
public  benefit,  should  impose  obligations  precluding  further  improvements  and 
depriving  the  town  prospectively  of  those  advantages  and  conveniences  which 
the  municipality  was  created  to  supply,  and  without  which  it  is  worthless. 
For  if  the  village  might  bind  itself  to  one  market  house  for  ten  years,  it  might 
do  so  for  all  time  to  come;  and  if  it  might  agree  that  improvements  and  con- 
veniences of  one  class  ought  to  be  confined  by  contract  to  one  quarter  of  the 
town,  a  reckless  or  improvident  board  might  agree  with  a  greedy  or  unscrupu- 
lous proprietor  of  town  lots,  that  all  improvements  of  every  description  should 
be  so  located  or  made  as  to  conduce  to  his  benefit,  irrespective  to  the  general 
good.  It  is  impossible  to  predicate  resonableness  of  any  contract  by  which 
the  governing  authority  abdicates  any  of  its  legislative  powers,  and  precludes 
itself  from  meeting  in  the  proper  way  the  emergencies  that  may  arise.  Those 
powers  are  conferred  in  order  to  be  exercised  again  and  again,  as  may  be  found 
needful  or  politic,  and  those  who  hold  them  in  trust  today  are  vested  with  dis- 
cretion to  circumscribe  their  limits  or  diminish  their  efficiency  but  must  trans- 
mit them  unimpaired  to  their  successors.  This  is  one  of  the  fundamental 
maxims  of  government,  and  it  is  impossible  that  free  government,  with  re- 
strictions for  the  protection  of  individual  or  municipal  rights,  could  exist 
without  its  recognition." 

I  am,  therefore,  obliged  to  withhold  executive  approval  from 
the  pending  measure  on  account  of  its  unconstitutionally  and  be- 
cause of  my  belief  that  it  contravenes  sound  public  policy. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


SENATE  BILL  No.  370. 

MARCH  11,  1907. 

Mr.  President  and  Gentlemen  of  the  Senate: 

I  return  herewith,  without  my  approval,  Senate  Bill  No.  370, 
a  bill  to  authorize  cities  and  towns  having  a  population  between 
20,000  and  35,000,  according  to  the  United  States  census  of  1900, 
to  pay  each  member  of  the  veteran  volunteer  firemen  association  a 
pension  of  $3.00  per  month. 

The  bill,  in  my  judgment,  is  invalid.  The  population  is  based 
upon  the  census  of  1900.  It  therefore  creates  a  class  of  cities  into 
which  no  other  city  can  come,  though  it  may  attain  the  same  popu- 


314 

lation  and  have  every  essential  characteristic  belonging  to  the  class 
so  created. 

•    Speaking  of  a  similar  law,  the  Supreme  Court  has  said : 

"Counsel  for  appellants  argue  with  much  earnestness  that  the  act  in  ques- 
tion must  be  regarded  as  special  legislation,  for  the  reason  that,  by  the  express 
provisions  of  its  first  section,  it  is  limited  in  its  application  to  cities  only  of 
30,000  for  the  year  1870.  Therefore,  they  insist  that  the  city  of  Indianapolis  is 
the  only  one  in  this  State  which,  at  the  time  of  the  passage  of  the  act,  had 
attained  to  the  standard  of  population  fixed  by  its  provisions. 

"Of  this  fact  we  have  taken  judicial  notice,  as  all  courts  are  required  to 
take  judicial  knowledge  of  the  census  of  the  United  States.  It  is  contended 
that  no  matter  how  many  cities  of  the  State  might,  under  the  federal  census  of 
1880  or  1890,  or  any  other  future  census,  have  30,000  or  more  inhabitants, 
the  act  in  controversy  would  not  be  applicable  to  any  of  them,  because  they 
did  not  and  could  not  in  reason  have  such  population  according  to  the  census 
of  1870.  *  *  * 

"Were  it  not  for  the  express  declaration  in  section  one,  which  absolutely 
fixes  the  census  of  1870,  and  confines  it  to  that  alone,  as  the  one  by  which 
the  population  is  to  be  determined,  it  might  be  viewed  as  one  general  in  its 
operation,  applying  alike  to  all  cities  within  the  classification  of  30,000  or 
more  inhabitants.  But  this  express  declaration  upon  the  part  of  the  legisla- 
ture would  seem  to  countervail  or  destroy  whatever  general  features  the  act 
possesses  by  restricting  its  operation  to  such  cities  as  had  the  required  popu- 
lation according  to  the  census  of  1870.  Any  and  all  other  cities,  which  might 
by  a  future  census  be  shown  to  be  within  the  classification  of  30,000  inhab- 
itants or  more,  by  this  express  provision  of  the  statute  would  necessarily  be 
excluded  from  its  operation.  That,  under  such  circumstances,  a  law  of  this 
character  must  be  regarded  as  special,  and  not  general,  legislation  seems  to 
be,  according  to  the  authorities,  a  well-settled  proposition." 

Being  special  legislation,  I  take  it  to  be  within  the  inhibition 
contained  in  Section  68,  Article  1,  of  the  State  Constitution,  for- 
bidding the  General  Assembly  to  grant  to  any  citizen  or  class  of 
citizens  privileges  or  immunities  which  upon  the  same  terms  shall 
not  equally  belong  to  all  citizens. 

Respectfully  submitted, 

J  FRANK  HANLY, 

Governor. 


315 
SENATE  BILL  No.  9. 

MARCH  13,  1907. 
Mr.  President  and  Gentlemen  of  the  Senate: 

Senate  Bill  No.  9  is  respectfully  returned  herewith  without  ex- 
ecutive approval.  The  bill  is  an  act  to  amend  section  50  of  an  act 
of  May  12,  1869,  relating  to  the  compensation  of  trustees  of  sav- 
ings banks. 

Under  the  present  law  such  banks  may  compensate  their  trus- 
tees (other  than  officers  of  such  savings  banks  or  members  of  the 
financial  committee)  only  "for  special  personal  services  beyond  the 
ordinary  duty  of  attending  meetings  and  serving  upon  its  com- 
mittees." The  present  bill  authorizes  the  compensation  of  such 
trustees  who  render  personal  services  though  such  services  consist 
only  of  attending  meetings  and  serving  upon  its  committees.  Sav- 
ings banks  are  not  stock  companies.  They  are  mutual  affairs.  Sal- 
aries to  officers  and  the  expenses  of  administration  ought  to  be 
closely  limited.  No  difficulty  in  obtaining  the  services  of  efficient 
persons  as  trustees  is  experienced  under  the  present  law.  The 
duties  of  such  trustees  are  not  arduous  and  unless  they  render 
some  service  other  than  the  nominal  service  required  in  attending 
meetings  and  serving  upon  committees,  compensation  ought  not 
to  be  authorized. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

SENATE  BILL  No.  432. 

MARCH  13,  1907. 
Mr.  President  and  Gentlemen  of  the  Senate: 

I  return  herewith  without  executive  signature,  Senate  Bill  No. 
432,  "fixing  the  compensation  of  the  members  of  the  common  coun- 
cil of  cities  of  the  first  class." 

The  measure  provides  for  an  increase  in  the  salaries  of  the 
members  of  the  common  council  of  the  city  of  Indianapolis  from 
$200.00  to  $900.00  per  annum.  I  do  not  believe  conditions  war- 
rant an  increase  of  450  per  cent,  in  the  salaries  of  these  officials. 
The  office  of  councilman  was  never  intended  to  be  a  position  of 
substantial  profit.  Its  duties  do  not  require  daily  application, 
either  of  time  or  attention.  I  recently  had  occasion  to  refuse  ap- 


316 

proval  to  House  Bill  No.  359  to  increase  the  salaries  of  members 
of  the  board  of  safety  of  the  city  of  Indianapolis.  The  reasons 
given  for  executive  action  in  that  matter  obtain  with  increased 
force  in  the  present  instance.  I  have  since  seen  no  reason  to  change 
the  views  there  expressed,  and  I  therefore  withhold  executive  as- 
sent to  the  provisions  of  the  present  measure. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


SENATE  BILL  No.  484. 

MARCH  13,  1907. 
Mr.  President  and  Gentlemen  of  the  Senate : 

I  return  herewith  Senate  Bill  No.  484  without  executive  ap- 
proval. 

The  bill  seeks  to  legalize  and  declares  valid  "all  assessments  of 
banks  in  this  State  made  as  provided  by  Section  59,  Acts  of  1891, 
approved  March  6,  1891,  upon  blanks  prescribed  by  the  State 
Board  of  Tax  Commissioners  of  the  State  of  Indiana." 

The  act  under  which  these  assessments  were  made  has  been  held 
unconstitutional  and  void  by  two  successive  Attorneys-General  of 
the  State,  and  I  believe  correctly  so.  The  reasons  upon  which  the 
opinions  are  based  are  constitutional  ones.  If  such  act  is  within 
the  inhibitions  of  the  Constitution  it  cannot  be  legalized  by  the 
General  Assembly  and  any  measure  seeking  to  do  so  would  be  in- 
valid for  the  same  reasons  that  the  act  sought  to  be  legalized  is 
invalid. 

If  assessments  made  under  such  act  are  invalid  because  of  its  un- 
constitutionally, they  cannot  be  legalized  by  any  act  of  the  Gen- 
eral Assembly. 

Believing  that  the  banks  in  question  were  not  lawfully  assessed, 
that  the  act  under  which  assessments  were  made  is  invalid  and  that 
such  assessments  are  therefore  invalid,  and  that  the  General  Assem- 
bly has  no  authority  to  legalize  an  unconstitutional  enactment  or 
any  proceedings  thereunder,  I  am  compelled  to  withhold  my  ap- 
proval of  this  bill. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


317 
SENATE    BILL    No.    498. 

MARCH  18,  1907. 
Mr.  President  and  Gentlemen  of  the  Senate  : 

Senate  Bill  No.  498  is  respectfully  returned  herewith  without 
executive  approval. 

The  bill  seeks  to  amend  section  £  of  the  act  regulating  the 
practice  of  medicine,  surgery  and  obstetrics,  providing  for  the 
issuing  of  license  to  practice,  for  the  appointment  of  a  State  Board 
of  Medical  Registration  and  Examination,  and  for  the  revocation 
of  licenses  to  practice  in  certain  instances. 

The  present  law  provides  that  a  physician  whose  license  has 
been  revoked  by  the  Board  of  Medical  Registration  and  Examina- 
tion shall  not  practice  his  profession  pending  an  appeal  from  the 
decision  of  the  board.  The  proposed  amendment  grants  the  right 
to  such  physician  to  engage  in  the  practice  of  his  profession  pend- 
ing the  appeal. 

I  do  not  believe  the  change  would  be  beneficial  to  the  public  in- 
terests. The  present  law  imposes  no  hardship.  Before  the  license 
of  a  physician  can  be  revoked,  charges  must  be  filed  with  the  board. 
The  accused  must  be  given  a  hearing.  If,  upon  the  hearing,  the 
board  finds  him  guilty  of  the  charges  made,  it  may  revoke  his 
license.  From  this  judgment  he  may  appeal  to  the  circuit  court, 
and  from  the  judgment  of  that  court  to  the  Supreme  Court  of  the 
State.  I  j  !  !  -1  I 

There  is  little  danger  of  abuse  under  this,  law.  The  Board  of 
Medical  Registration  and  Examination  would  be  slow  to  revoke  the 
license  of  a  fellow  practitioner,  except  for  substantial  reason.  If 
the  amendment  were  made,  physicians  whose  licenses  should  be  re- 
voked would  be  privileged  to  continue  in  practice  until  final  deci- 
sion in  the  Supreme  Court,  no  matter  how  great  the  offense  of 
which  they  were  guilty,  or  how  unfit  they  might  be. 

For  these  reasons  I  believe  it  best  to  withhold  executive  ap- 
proval. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


House  Veto  Messages,  Sixty-Fifth 
General  Assembly 


(819) 


321 
HOUSE  BILL  No.  327. 


FEBRUARY  1,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith,  without  my  approval,  House  Enrolled  Bill 
No.  327,  the  same  being  a  bill  for  an  act  to  amend  sections  1  and 
3  of  an  act  to  incorporate  Young  Men's  Christian  Associations  or- 
ganized in  this  State. 

The  bill  is  a  meritorious  one,  and  I  have  withheld  approval 
therefrom  solely  on  account  of  its  failure  to  comply  with  the  re- 
quirements of  the  State  Constitution. 

Section  19  of  the  Constitution  requires  the  subject  of  every  act 
to  be  expressed  in  the  title  and  declares  void  so  much  of  any  act 
as  is  not  expressed  in  the  title. 

R.  S.  1901,  Sec.  115. 

The  act  sought  to  be  amended  is  clearly  valid.  It  applies  to 
the  incorporation  of  Young  Men's  Christian  Associations  organized 
in  this  State.  By  the  amendment  sought  to  be  made  in  the  present 
bill,  the  provisions  of  the  act  are  made  to  include  Young  Women's 
Christian  Associations  organized  in  the  State.  It  also  provides : 
"That  any  Young  Women's  Christian  Associations  heretofore  or- 
ganized under  and  by  virtue  of  said  act,  approved  March  4,  1893, 
be  and  the  same  are  hereby  legalized  and  rendered  valid  and  de- 
clared legally  and  regularly  incorporated."  Neither  of  these  ad- 
ditional subjects  or  purposes  is  expressed  in  the  title  to  the  origi- 
nal act,  and  the  title  to  the  present  act  in  this  respect  remains  un- 
changed. 

Speaking  to  this  point  the  Supreme  Court  of  the  State  has 
said: 

"If  the  subject  is  composed  of  two  or  more  essential  elements,  the  expres- 
sion of  one  of  such  elements  in  the  title  would  not  suffice.  The  absence  of  one 
of  such  elements  in  the  title  would  be  as  misleading,  and  might  be  as  perni- 
cious, as  the  evils  sought  to  be  obstructed  by  the  Constitution.  The  subject 
of  this  act,  as  we  have  indicated,  is  to  gather  funds  from  foreign  insurance 
companies,  and  to  dispose  of  such  funds  for  the  relief  of  firemen.  The  title 
expresses  the  first  of  these  objects  included  within  the  subject,  but  wholly 
omits  the  other  of  such  objects. 

"In  State  v.  Young,  47  Ind.  150,  a  test  was  prescribed  for  determining 
if  the  subject  is  expressed  in  the  title.  It  was  said,  in  speaking  of  that  element 
of  the  subject  claimed  to  be  absent  from  the  title:  'Suppose  that  there  was  no 
other  provision  in  the  act.  *  *  *  If  the  section  could  not  thus  stand  alone 

[21—19891] 


322 

under  the  title,  it  must  fall.'  We  apprehend  that  this  is  always  true  where 
only  a  part  of  the  subject  is  expressed,  and  that  it  is  especially  true  where 
that  part  of  the  subject  omitted  from  the  title  is  not  naturally  or  ordinarily 
connected  with  that  part  of  the  subject  which  is  expressed  in  the  title. 

"Omitting  that  part  of  the  act  relative  to  the  bestowal  of  such  fund  upon 
firemen,  the  provision  requiring  such  companies  to  contribute  to  such  fund 
could  not  stand  alone,  under  the  title  of  the  act,  as  the  subject  is  expressed. 
The  requirement  that  the  subject  expressed  should  apprise  the  people  of  the 
subject  of  legislation,  in  order  that  an  opportunity  for  a  hearing  or  for  peti- 
tion may  he  had,  is  far  from  being  complied  with  in  the  act  before  us.  No 
notice  whatever  to  those  expected  to  contribute  to  such  fund  is  given." 
Henderson  v.  London,  etc.,  Insurance  Company,  135  Ind.  31. 

The  title  to  the  bill  herewith  returned  relates  solely  to  Young 
Men's  Christian  Associations,  and  does  not  include  that  part  of 
the  subject  which  relates  to  Young  Women's  Christian  Associations, 
or  that  part  which  relates  to  the  legalization  of  such  incorporations 
as  have  been  heretofore  made.  While  the  title  to  the  act  sought  to 
be  amended  sufficiently  covers  the  subject  and  purposes  of  that  act, 
it  does  not  sufficiently  cover  the  subject  and  purposes  of  the  act  as 
it  is  sought  to  be  amended.  If  the  statute  as  amended  contained 
only  that  portion  which  relates  to  Young  Women's  Christian  Asso- 
ciations or  which  seek  to  legalize  past  organizations  of  such  asso- 
ciations, the  title  would  be  clearly  insufficient.  It  therefore  fails 
to  meet  the  constitutional  requirement. 

Section  21  of  the  Constitution  also  provides  that  "no  act  shall 
ever  be  revised  or  amended  by  mere  reference  to  its  title ;  but  the 
act  revised  or  section  amended  shall  be  set  forth  and  published  at 
full  length." 

R.  S.  1901,  Sec.  117. 

In  a  recent  decision  referring  to  this  section  of  the  Constitu- 
tion, the  Supreme  Court  said : 

"It  is  settled  by  the  decisions  of  this  court  that  in  the  revision  of  an  act 
or  the  amendment  of  a  section,  two  things  are  required:     (1)  The  title  of  the 
act  to  be  amended  must  be  referred  to  by  setting  it  out;    (2)   the  act  as  re- 
vised, or  section  as  amended,  must  be  set  forth  and  published  at  length." 
Lingquist  v.  State,  153  Ind.  at  543. 

.  In  the  present  bill  the  title  of  the  act  sought  to  be  amended  is 
inaccurately  set  out,  the  word  "estate"  being  interpolated  therein. 
In  the  light  of  these  constitutional  provisions,  and  in  view  of 
the  defects  in  the  present  measure,  I  deem  it  best  to  withhold  ap- 
proval therefrom.  The  act  relates  to  an  important  subject.  The 
present  law  is  free  from  defects.  Its  amendment  should  be  equally 
so.  I  therefore  suggest  the  enactment  of  a  statute  which  shall  be 


323 

so  drawn  as  to  avoid  constitutional  inhibitions     If  this  is  done  I 
shal]  be  glad  to  give  executive  approval  thereto. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  230. 


FEBRUARY  25,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith,  without  executive  approval,  House  Bill  No. 
280,  the  same  being  a  bill  "to  enable  owners  of  land  bordering  on 
Lake  Michigan  to  acquire  title  to  submerged  lands  belonging  to 
Indiana,"  and  lying  in  front  of  said  abutting  land  and  between  the 
shore  line  of  said  lake  and  the  dock  or  harbor  line  thereof  now  es- 
tablished or  hereafter  to  be  established  by  the  Government  of  the 
United  States. 

The  lands  affected  by  this  measure  vary  in  width  from  a  few 
rods  to  three-fourths  of  a  mile. 

The  only  requirements  exacted  of  the  owners  of  the  lands  de- 
scribed to  obtain  title  to  the  submerged  lands  in  question  are,  that 
they  shall  cause  a  survey  and  plat  of  such  lands  to  be  made  by 
the  county  surveyor,  showing  the  number  of  acres  thereof  and  the 
location  of  the  dock  line,  which  survey  and  plat  shall  be  filed  with 
the  Secretary  of  State,  and  that  they  pay  to  the  State  Treasurer 
$25.00  per  acre  for  the  acres  shown  in  such  plat.  No  other  condi- 
tion is  imposed.  The  survey  made,  plat  filed  and  $25.00  per  acre 
paid,  the  State,  through  the  Governor  and  Secretary  of  State, 
must  execute  a  patent  to  the  lands  therein  described,  conveying  to 
such  owners  the  fee  simple  title  thereto. 

The  legislation  proposed  is  said  to  be  necessary  to  the  opera- 
tion of  a  large  number  of  industries  either  now  removed  or  to  be 
removed  from  the  city  of  Chicago  to  the  Indiana  boundary  of  the 
lake.  There  is  much  merit  in  this  contention.  These  industries 
are  desirable.  If  established  they  will  add  millions  of  dollars  to 
the  taxable  property  of  the  State  and  furnish  employment  to 
thousands  of  laborers.  This  section  of  the  State  is  destined  to  be 
a  vast  industrial  center  and  to  be  peopled  by  a  great  population. 
Here  industries  can  be  established  by  the  side  of  navigable  waters 
with  immediate  access  to  water  carriers  of  all  draughts,  lengths  and 
breadths,  without  obstruction  from  bridges  or  other  structures.  I 


324 

am  heartily  in  accord  with  the  suggestion  that  the  State  should 
treat  these  industries  with  kindly  consideration. 

The  present  measure,  however,  I  believe  to  be  unfair  to  the 
State  and  calculated  to  ultimately  defeat  the  very  purpose  it  seeks 
to  effectuate.  Under  its  provisions  any  person  owning  lands  abut- 
ting upon  the  lake  may  obtain  title  to  the  submerged  lands  lying 
in  front  of  his  lands  and  between  the  lake  shore  and  the  harbor 
line  by  merely  causing  a  survey  to  be  made  and  paying  $25.00  per 
acre  to  the  State  for  the  lands  described  in  such  survey.  He  is  not 
required  to  fill  in  these  lands  nor  to  improve  them  in  any  way.  He 
simply  causes  the  survey  to  be  made,  pays  the  stipulated  price 
and  takes  his  title.  This  puts  it  in  the  power  of  speculators  to 
buy  up  the  lands  bordering  on  the  most  advantageous  points  of  the 
lake  front,  cause  the  submerged  lands  in  front  to  be  surveyed  and 
get  title  thereto  by  the  payment  of  $25.00  per  acre,  and  hold  them 
indefinitely,  or  to  compel  those  who  seek  to  establish  industries 
upon  the  lake  front  to  pay  extortionate  prices  therefor.  Such  an 
opportunity  ought  not  to  be  given  by  legislation. 

It  is  said  that  the  United  States  Steel  Company  and  other  per- 
sons desiring  to  establish  industries  upon  the  lake  shore,  desire 
to  fill  these  submerged  lands  out  to  the  dock  line  that  vast  furnaces 
and  other  manufacturing  establishments  may  be  established  there- 
on and  in  such  proximity  to  the  dock  as  to  permit  the  unloading  of 
ores  and  other  cargoes  at  the  furnace  or  factory  doors. 

This  can  be  obtained  with  safety  to  the  State  and  with  like 
convenience  to  such  persons  without  making  these  lands  the  toy 
of  speculators.  It  should  be  provided  that  any  person  owning 
lands  abutting  upon  the  lake  shore  may  have  the  submerged  lands 
in  front  thereof  lying  between  the  shore  line  and  the  harbor  line 
surveyed  and  upon  the  filing  of  the  survey  and  the  plat  of  such 
lands  with  the  Secretary  of  State,  he  may  receive  authority  from 
the  State,  issued  by  the  Governor  and  the  Secretary,  to  fill  and 
improve  the  same,  and  upon  the  completion  of  such  filling  and  im- 
provement and  the  filing  of  satisfactory  evidence  that  the  same  has 
been  done,  he  may  receive  from  the  State  a  patent  vesting  in  him 
the  title  to  so  much  thereof  as  he  may  have  filled  and  improved. 

This,  I  believe,  will  meet  every  requirement  of  these  industries 
and  save  the  State  its  rights  in  other  lands  that  are  not  filled  and 
improved,  and  keep  the  lands  that  are  not  so  used  and  are  so 
saved,  from  the  hands  of  speculators.  I  am  sure  the  State  having 
reserved  the  title  to  itself  until  the  lands  are  filled  and  improved 
will  deal  more  liberally  and  fairly  with  those  seeking  to  establish 


325 

industries  on  the  lake  shore  in  the  future  than  real  estate  specula- 
tors could  be  expected  to  do. 

There  is,  however,  doubt  of  the  constitutionality  of  such  legis- 
lation in  the  form  of  the  present  measure,   and  any  bill  drawn 
should  be  carefully  drawn  in  the  light  of  such  objections  and  with 
a  view  of  avoiding  constitutional  questions. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  134. 


FEBRUARY  27,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith,  without  executive  approval,  House  Bill  No. 
134. 

This  bill  seeks  to  amend  the  law  relating  to  the  organization 
and  incorporation  of  loan  and  trust  and  safe  deposit  companies. 

The  present  law  authorizes  the  organization  of  such  com- 
panies in  cities  of  50,000  inhabitants  or  over  with  a  capital  of 
$100,000;  in  cities  under  50,000  and  over  25,000  inhabitants  a 
capital  of  $50,000  is  required;  in  cities  less  than  25,000.  inhabit- 
ants a  capital  of  not  less  than  $25,000. 

The  amendment,  proposed  permits  such  companies  to  be  organ- 
ized in  cities  having  a  population  of  less  than  15,000  with  a  capi- 
tal stock  of  only  $15,000.  I  believe  $15,000  capital  to  be  insuffi- 
cient for  any  corporation  possessing  the  powers  and  responsibili- 
ties authorized  and  devolved  upon  trust  companies.  There  is  grave 
question  about  the  propriety  of  permitting  even  commercial  banks 
to  be  organized  with  a  capital  as  meager  as  $15,000,  however 
small  the  community  may  be.  When  applied  to  trust  companies 
the  question  becomes  one  of  such  grave  import  as  to  challenge  the 
most  thoughtful  consideration. 

These  companies  are  the  depositories  of  trust  funds  and  savings 
accounts  possessing  more  or  less  permanency  of  character.  They 
may  act  as  executors,  administrators,  trustees,  receivers  or  as- 
signees, and  when  so  appointed  serve  without  bond.  In  any  such 
case  the  only  security  the  beneficiaries  of  the  trust  have  is  the  capi- 
tal stock  of  the  company,  plus  the  statutory  liability  of  the  stock- 
holders, which,  in  case  of  failure  of  the  company,  is  usually  greatly 
impaired  by  the  insolvency  of  some  of  the  stockholders. 


32(5 

It  is  not  unusual  for  such  companies,  acting  in  the  various  ca- 
pacities suggested,  to  have  in  charge  estates  and  trusts  of  great 
value,  or  at  least  far  beyond  the  nominal  capital  proposed  in  this 

bill. 

In  addition  to  the  powers  and  functions  already  suggested,  such 
companies  are  authorized  by  the  law  to  execute  surety  bonds,  and 
many  of  them  are  now  doing  so. 

All  these  powers,  privileges  and  functions  will  be  devolved  upon 
the  companies  to  be  created  under  the  amendment  here  proposed. 
They  are  too  great  and  too  far-reaching  and  affect  the  interests  of 
too  many  people  to  be  devolved  upon  institutions  or  corporations 
possessing  a  nominal  capital  of  only  $15,000.00. 

The  minimum  capital  permitted  under  the  present  law  is  $25,- 
000.00.  So  far  as  I  am  advised  the  present  limitation  works  no 
hardship  upon  any  community  in  the  State.  Wherever  there  is 
need  of  such  an  institution,  sufficient  capital  can  readily  be  found 
to  meet  the  present  requirement. 

These  considerations  lead  me  to  withhold  my  approval  from 
the  bill,  and  to  express  the  hope,  that  upon  reconsideration,  the 
General  Assembly  will  not  insist  upon  its  enactment. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  216. 


FEBRUARY  27,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

House  Bill  No.  216,  the  same  being  a  bill  "to  provide  for  the 
inspection  and  analysis  of  and  to  regulate  the  sale  of  concentrated 
commercial  feeding  stuff  in  the  State  of  Indiana,"  is  returned 
herewith  without  executive  approval. 

I  am  in  accord  with  the  general  purpose  of  this  bill  and  believe 
many  of  its  provisions  ought  to  be  incorporated  in  the  law,  but  the 
measure  as  drawn  ought  not  to  be  enacted.  Some  of  its  provisions 
arc  unnecessary  and  would  impose  unjustifiable  hardship  upon 
many  people  of  the  State. 

In  effect  it  provides  that  before  any  person  may  sell  or  offer 
for  sale  any  linseed  meals,  cocoanut  meals,  gluten  feeds,  gluten 
meals,  germ  feeds,  corn  feeds,  maize  feeds,  starch  feeds,  sugar 
feeds,  dried  brewers'  grains,  malt  sprouts,  dried  distillers'  grains, 


327 

dried  beet  refuse,  hominy  feeds,  cerealine  feeds,  rice  meals,  rice 
bran,  rice  polish,  peanut  meals,  oat  feeds,  corn  and  oat  feeds,  corn 
bran,  wheat  bran,  wheat  middlings,  wheat  shorts  and  other  mill 
products,  ground  beef  or  fish  scraps,  dried  blood,  blood  meals, 
bone  meals,  tankage,  meat  meals,  slaughter  house  waste  products, 
mixed  feeds,  clover  meal,  alfalfa  meal  and  feeds,  peavine  meal,  cot- 
ton seed  meal,  velvet  bean  meal,  sucrenc^  mixed  feeds  and  meals 
made  from  seeds  or  grains,  and  all  materials  of  similar  nature  used 
for  food  for  domestic  animals,  condiment al  feeds,  poultry  feeds, 
stock  feeds,  patented,  proprietary  or  trade  and  market  stock  and 
poultry  feeds,  he  shall  file  with  the  State  chemist  a  statement  that 
he  desires  to  offer  the  same  for  sale  in  this  State,  with  a  certificate 
stating  the  name  of  the  manufacturer,  the  location  of  the  principal 
office  of  the  manufacturer,  the  name,  brand  or  trade-mark  under 
which  the  commodity  will  be  sold,  the  names  of  the  towns  in  Indi- 
ana where  it  will  be  offered  for  sale,  the  ingredients  from  which  it 
is  compounded,  the  minimum  percentage  of  crude  fat  and  crude 
proteine  and  the  maximum  percentage  of  crude  fiber  which  such 
manufacturer  guarantees  such  product  to  contain,  and  cause  a  tag 
or  tablet  to  be  attached  to  every  one  hundred  pounds  or  fraction 
thereof  of  the  product,  containing  the  information  above  referred 
to,  together  with  a  stamp  to  be  furnished  by  the  State  Chemist  at 
a  cost  of  $1.00  per  hundred  stamps.  These  stamps  cannot  be  pur- 
chased in  less  quantities  than  500. 

These  provisions  apply  to  every  miller  and  every  farmer  who 
sells  or  offers  for  sale  corn  feeds  of  any  kind  and  would  impose 
unusual  and  unnecessary  restriction  »pon  the  sale  of  products 
that  are  well  known  and  which  are  rarely,  if  ever,  adulterated. 

The  provision  that  the  State  Chemist  shall  be  notified  of  the 
towns  in  the  State  where  such  products  wrill  be  offered  for  sale  is 
a  fair  sample  of  the  many  unnecessary  requirements  of  the  measure. 

It  is  provided  that  the  money  paid  for  the  stamps  required  to 
be  used  shall  be  paid  to  the  State  Chemist  and  by  him  paid  to  the 
director  of  the  Indiana  Agricultural  Experiment  Station  and  by 
such  director  into  the  treasury  of  the  Indiana  Agricultural  Experi- 
ment Station ;  it  is  also  provided  that  the  board  of  control  of  such 
experiment  station  may  expend  the  same  in  necessary  expenses  in- 
curred in  carrying  out.  the  provisions  of  the  bill  and  other  expenses 
for  the  station.  No  accounting  is  required  of  the  board  of  con- 
trol to  any  department  of  Hie  State  government.  All  such  fees 
\\lien  paid  become  public  moneys,  and  their  disbursement  should 
only  be  made  upon  proper  voucher  and  under  provision  that  an 


328 

accounting  shall  be  made  either  to  the  Auditor  of  State  or  to  the 
Executive  Department.  Failure  to  provide  for  this  is  so  important 
as  to  alone  preclude  executive  approval  of  the  present  measure. 

There  is  also  a  provision  authorizing  the  State  Chemist  to 
adopt  standards  for  all  the  feeds  described  in  the  bill.  This  I  be- 
lieve should  not  be  left  to  his  discretion.  Standards  of  each  of 
these  feeds  are  readily  obtained  and  if  in  purity  and  nutriment 
any  of  them  measure  up  to  such  standard,  it  should  be  sufficient. 

After  enumerating  all  the  feeds  hereinbefore  named,  it  is  pro- 
vided that  "concentrated  commercial  feeding  stuff"  shall  include 
"any  other  feeds  which  the  State  Chemist  decides  should  be  in- 
cluded in  the  class  of  concentrated  commercial  feeds."  This  is  an 
unusual  and  dangerous  power  to  confer  upon  any  administrative 
officer.  What  feeds  are  within  the  law  is  made  dependent  upon  his 
whim  or  will.  It  gives  him  a  world-wide  commission  and  lodges  in 
his  hands  unwarranted  and  arbitrary  power,  which  may  be  misused 
to  the  annoyance  and  disadvantage  of  many  people. 

As  hereinbefore  suggested,  I  am  heartily  in  favor  of  legislation 
that  will  require  all  persons  engaged  in  selling  commercial  feeds 
or  compounds  to  give  full  information  as  to  the  purity  and  char- 
acter of  such  feed  where  such  persons  are  engaged  in  the  sale  of 
such  products  as  a  business,  but  the  legislation  should  be  drafted 
with  care  so  that  unreasonable  restriction  may  not  be  imposed; 
that  all  fees  collected  by  officers  charged  with  the  enforcement  of 
the  law  shall  be  accounted  for  to  the  proper  executive  authority, 
and  that  the  feeds  included  be  definitely  fixed  by  the  law  and  not 
left  to  the  will  or  whim  of  any  administrative  officer. 

There  is  yet  another  and  conclusive  reason  why  executive  ap- 
proval should  be  withheld  from  this  bill,  found  in  the  following 
provision : 

"In  all  litigation  arising  from  the  purchase  or  sale  of  any  concentrated 
commercial  feeding  suff,  in  which  the  composition  of  the  same  may  be  involved, 
a  certified  copy  of  the  official  analysis,  signed  by  the  State  Chemist,  shall  be 
accepted  as  conclusive  proof  of  the  composition  of  such  concentrated  commer- 
cial feeding  stuff." 

The  determination  of  what  shall  be  conclusive  proof  of  any  es- 
sential fact  in  the  trial  of  a  cause  before  a  judicial  tribune  is  a 
judicial  and  not  a  legislative  function.  The  Legislature  cannot 
declare  an  act  to  be  a  crime,  and  then  provide  that  a  specific  item 
of  evidence  shall  be  conclusive  proof  of  guilt. 

Under  the  above  provision  of  this  bill  one  charged  with  the 
violation  of  any  of  its  provisions  could  introduce  no  evidence  in 


329 

his  own  behalf  where  the  issue  involved  the  composition  of  any  of 
the  feeds  named.  The  mere  introduction  of  a  certified  copy  of  the 
State  Chemist's  analysis  would  end  the  case.  The  court  could  ex- 
ercise no  judicial  discretion,  but  would  be  bound  to  find  the  defend- 
ant guilty  whether  the  analysis  of  the  State  Chemist  was  in  fact 
correct  or  not. 

If  the  power  to  say  what  shall  be  conclusive  evidence  of  any  fact 
in  issue  in  the  trial  of  a  cause  were  vested  in  the  General  Assembly, 
a  co-ordinate  branch  of  the  government  would  be  struck  down  and 
the  judiciary  become  a  machine  without  power  to  do  more  than 
register  the  legislative  will. 

Such  statutes  have,  without  exception,  been  held  invalid  by  the 
Supreme  Court  of  this  State. 

In  an  early  case  it  is  said: 

"It  has  been  held,  and  it  would  seem  that  the  decision  must  be  cor- 
rect, that  it  is  not  competent  for  the  legislative  power  to  declare  what  shall  be 
conclusive  evidence  of  a  fact." 

Wantlan  v.  White,  19  Ind.  at  472. 

In  another  case  it  is  said : 

"The  statute  enacts  that  the  deed  shall  be  conclusive  evidence  of  the  facts 
recited.  Now,  we  do  not  suppose  the  Legislature  could  make  such  an  enact- 
ment." 

White  v.  Flynn,  23  Ind.  at  47. 

The  rule  is  again  declared  in  a  later  case : 

"Besides,  it  has  several  times  been  decided  that  the  Legislature  cannot 
declare  what  shall  be  conclusive  evidence." 

Scott  v.  Brackett,  89  Ind.  at  420. 

In  another  case  the  Court  said: 

"It  is  very  doubtful  whether  the  Legislature  can  enact  a  statute  declar- 
ing what  shall  constitute  conclusive  evidence,  but  we  do  not  find  it  necessary 
to  make  any  decision  upon  that  point." 

Heagy  v.  State,  85  Ind.  262. 

Speaking  to  the  same  point,  in  a  later  case,  in  construing  sec- 
tion 1811,  R.  S.  1881,  concerning  prosecutions  for  obstructing  a 
highway,  it  is  said: 

"This  section  should  not  be  construed  as  undertaking  to  make  such  proof 
conclusive  of  the  fact  that  the  way  alleged  to  have  been  obstructed  is  a  public 
highway.     The  Legislature  cannot  thus  make  any  item  of  evidence  conclusive." 
Johns  v.  State,  104  Ind.  at  561. 

In  yet  a  later  case  the  rule  is  restated  as  follows : 


330 

"If  the  controversy  were  one  between  individual  citizens,  it  could  be  dis- 
posed of  without  difficulty,  for  it  is  well  settled  that  the  Legislature  cannot 
declare  that  an  official  report  or  document  shall  be  conclusive  evidence  of  the 
matters  contained  in  it." 

Board  v.  State,  120  Ind.  282. 

This  decision  relates  to  the  official  statement  of  county  auditors 
as  to  the  amount  of  school  fund  held  in  trust  by  the  respective 
counties  under  the  act  of  1865  providing  that  such  statement 
"shall  be  taken  as  conclusive  evidence  of  the  facts  therein  con- 
tained." The  act  was  held  unconstitutional. 

Again,  in  a  well-considered  case,  it  is  declared : 

"A  law  which  would  in  effect  exclude  the  evidence  of  a  party  and  thereby 
deny  him  the  right  to  be  heard,  would  deprive  him  of  due  process  of  law.  A 
law  which  provides  that  certain  facts  are  conclusive  proof  of  guilt  would  l>e 
unconstitutional,  as  also  would  one  which  makes  an  act  prima  facie  evidence 
of  crime  which  has  no  relation  to  a  criminal  act,  and  no  tendency  whatever 
to  establish  a  criminal  act." 

State  v.  Beach,  147  Ind.  at  79. 

It  has  been  held  competent  for  the  General  Assembly  to  de- 
clare what  shall  constitute  prima  facie  evidence,  but  when  it  does 
"this  it  reaches  the  limit  of  its  authority  in  that  direction. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


HOUSE  BILL  No.  359. 


FEBRUARY  27,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

House  Bill  No.  359,  a  bill  to  increase  the  salaries  of  the  mem- 
bers of  the  Board  of  Safety  of  the  city  of  Indianapolis,  is  here- 
with returned  without  executive  approval. 

Under  the  present  law  the  salaries  of  the  members  of  this  board 
are  placed  at  $600.00  per  annum.  This  bill  increases  them  to 
$1,200.00  per  annum,  an  increase  of  100  per  cent.  It  may  be  that 
the  present  salaries  are  too  low,  but  I  am  impressed  with  the  con- 
viction that  the  increase  here  provided  for  is  unreasonable  and 
unjustifiable  from  any  proper  point  of  view.  The  Board  of  Public 
Safety  is  one  of  a  number  of  departments  in  every  citw  govern- 
ment, honorable  and  responsible  in  character,  but  never  intended 
to  be  positions  of  substantial  profit.  The  duties  of  the  members  of 


331 

this  board  arc  not  of  a  continuous  character.  They  do  not  require 
daily  application  of  time  or  attention.  While  they  may  to  some 
extent  interrupt  the  business  affairs  of  those  who  hold  such  posi- 
tions, they  do  not  preclude  the  incumbents  from  pursuing  their 
usual  vocations.  The  department  is  divided  into  and  has  jurisdic- 
tion over  a  number  of  minor  departments,  but  each  of  these  de- 
partments has  an  executive  officer  or  chief  whose  duty  it  is  to  ad- 
minister the  affairs  of  his  department,  the  board  having  only  gen- 
eral supervision  or  direction.  As  a  rule  meetings  arc  held  only  at 
fixed  periods  and  are  of  brief  duration.  If  membership  on  this 
board  is  attended  with  a  salary  of  $100.00  per  month  it  will  be- 
come a  prize  for  place  hunters  and  cheap  politicians — men  whose 
qualifications  and  motives  arc,  to  say  the  least,  subject  to  question 
and  criticism.  The  present  salary  is  not  tempting  from  the  stand- 
point of  compensation.  No  business  man  of  capacity  accepts  a 
place  on  this  board  because  of  the  salary,  nor  would  the  increase 
of  $600.00  a  year  be  a  substantial  inducement  to  any  such  man  to 
accept  a  position  thereon.  The  increase,  however,  would  be  a 
standing  temptation  to  unfit  and  incapable  men.  The  city  of  In- 
dianapolis has  for  years  been  able  to  fill  these  positions  at  the  pres- 
ent salary.  I  am  convinced  it  will  be  able  to  continue  to  fill  them 
though  the  salary  remains  unchanged.  Men  of  character  and  ca- 
pacity will  still  continue  to  be  willing  to  serve  the  city  from  civic 
pride  and  unselfish  motives  in  the  future  as  they  have  in  the  past. 
A  trust  so  accepted  is  in  safer  hands  and  is  better  administered 
than  it  is  or  can  be  when  accepted  from  sordid  motives. 

While  the  views  here  submitted  arc  the  personal  views  of  the 
Executive,  they  arc  founded  upon  and  supported  by  information 
received  from  the  present  Comptroller  of  the  city  of  Indianapolis. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


332 
HOUSE  BILL  No.  344. 


MARCH  4,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

House  Bill  No.  844  is,  in  my  judgment,  unconstitutional,  be- 
cause of  its  failure  to  set  out  the  title  of  the  act  sought  to  be 
amended.  It  is  therefore  returned  without  executive  approval. 

The  title  of  the  bill  purports  "to  amend  Section  36,  Chapter  29, 
of  the  Acts  of  1903,  concerning  taxing  real  estate  incumbercd  by 
mortgage."  In  the  body  of  the  bill  the  act  sought  to  be  amended 
is  referred  to  as  follows :  "Section  36,  Chapter  29,  of  the  Acts  of 
1903,  of  an  act  concerning  the  taxing  of  real  estate  incumbered  by 
mortgage,  and  repealing  all  laws  in  conflict  therewith,  and  declar- 
ing an  emergency." 

By  reference  to  the  session  laws  of  1903,  page  49,  we  find 
Chapter  29,  referred  to  in  the  title  of  the  pending  bill,  but  the  title 
of  the  act  there  set  out  is  not  "An  act  concerning  taxing  real 
estate  incumbered  by  mortgage" ;  nor  is  such  title  "An  act  con- 
cerning the  taxing  of  real  estate  incumbered  by  mortgage,  and 
repealing  all  laws  in  conflict  therewith,  and  declaring  an  emer- 
gency." On  the  contrary,  the  title  to  the  act  contained  in  Chap- 
ter 29  of  the  session  laws  of  1903  is  an  unusually  long  and  com- 
plex one,  covering  fully  two  pages  of  the  volume  in  which  it  is 
found. 

There  is  in  this  act  a  section  36  relating  to  the  taxation  of  real 
estate  incumbered  by  mortgage.  It  is  evident  that  the  purpose 
of  this  bill  is  the  amendment  of  this  section.  The  section  sought 
to  be  amended,  however,  is  itself  an  amendment  of  section  one  of 
an  original  act  upon  this  subject,  which  became  a  law  without  the 
Governor's  signature  March  4,  1899,  the  title  of  which  is  "An  act 
concerning  the  taxation  of  real  estate  incumbered  by  mortgage 
and  declaring  an  emergency." 

It  will  be  observed  that  the  present  measure  does  not  attempt 
to  amend  section  one  of  this  original  act.  On  the  contrary,  it  is 
quite  clear  that  its  purpose  is  the  amendment  of  the  amended 
section  of  said  act.  This  being  true,  it  is  necessary  to  the  validity 
of  the  bill  that  its  title  set  forth  the  title  of  the  amendatory  act 
in  full.  Setting  out  the  title  to  the  original  act  is  not  sufficient. 

It  has  been  uniformly  held  by  the  Supreme  Court,  in  cases  in- 
volving the  amendment  of  a  section  of  an  act,  that  "the  title  of  the 


333 

act  to  be  amended  shall  be  referred  to  by  setting  the  same  out  in 
the  title  to  the  amendatory  act." 

Mankin  v.  Pennsylvania  Co.,  160  Ind.  at  453. 

By  comparing  the  two  titles,  that  of  the  pending  bill  and  that 
of  the  act  sought  to  be  amended,  it  will  be  seen  that  no  substantial 
part  of  the  title  of  the  act  sought  to  be  amended  is  set  out  in  the 
title  of  the  pending  measure.  In  fact,  there  is  no  attempt  to  do  so. 
A  title  covering  more  than  two  pages  of  the  session  laws  of  1903 
can  not  be  crowded  into  the  seven  words :  "Concerning  taxing  real 
estate  incumbered  by  mortgage,"  found  in  the  title  of  the  pending 
measure.  Nor  can  such  title  be  crowded  into  the  words :  "An  act 
concerning  taxing  of  real  estate  incumbered  by  mortgage,  and  re- 
pealing all  laws  in  conflict  therewith,  and  declaring  an  emergency," 
found  in  the  body  of  the  pending  measure. 

Section  21  of  Article  4  of  the  Constitution,  provides : 

"No  act  shall  ever  be  revised  or  amended  by  mere  reference  to  the  title; 
but  the  act  revised  or  section  amended  shall  be  set  forth  and  published  at  full 
length." 

The  most  that  can  be  said  for  the  present  bill  is  that  it  con- 
tains a  mere  reference  to  the  title  of  the  act  sought  to  be  amended. 
There  is  a  total  failure  to  set  it  out. 

In  the  case  of  O'Mara  v.  The  Wabash  Railroad  Company,  150 
Ind.  at  650,  the  title  of  the  amendatory  act  referred  to  the  title 
of  the  act  sought  to  be  amended  as  "being  an  act  concerning  civil 
procedure,"  when  the  actual  title  of  the  act  sought  to  be  amended 
was  "An  act  concerning  proceedings  in  civil  cases." 

In  this  case  the  Court  said: 

"The  title  of  the  act  of  1897  seems  to  have  been  possibly  intended  to  apply 
to  either  an  original  or  an  amendatory  act,  but  the  enacting  clause  and  sec- 
tion so  clearly  give  the  act  character  as  an  amendatory  act  that  an  intention 
to  enact  an  original  statute  is  not  probable.  We  see  no  escape  from  the  con- 
clusion that  the  act  does  not  express  the  subject  thereof  in  its  title  by  refer- 
ence to  the  act  or  the  title  of  the  act  to  be  amended.  It  is  threfore  invalid." 
O'Mara  v.  The  Wabash  Railroad  Company,  150  Ind.  at  650. 

In  another  recent  case  the  title  of  the  amendatory  act  read  as 
follows :  "An  act  to  amend  Section  359  of  an  act  concerning  trial 
by  jury,  in  force  September  19,  1881,  the  same  being  Section  525 
of  the  Revised  Statutes  of  1881."  The  actual  title  of  the  act 
sought  to  be  amended  was  "An  act  concerning  proceedings  in  civil 
cases."  The  Court  held  the  reference  in  the  title  to  Section  359  in- 
sufficient, saying: 


334 

"It  will  be  observed  that  the  amendatory  act  of  1891  does  not  refer  to 
the  title  of  the  act  to  be  amended  by  setting  it  out,  as  required  by  said 
Section  21  of  Article  4  of  the  Constitution,  but  refers  to  the  act  to  be  amended 
as,  'An  act  concerning  trial  by  jury,'  which  is  not  the  title  of  the  act  in  which 
said  Section  359,  supra,  may  be  found.  When  the  act  or  section  to  be  amended 
is  identified  in  the  manner  required  by  the  Constitution,  and  it  is  not  certain 
what  act  or  section  was  amended,  the  court  will  resort  to  means  other  than 
the  title  to  determine  what  act  or  section  was  amended.  But  if  the  title  or 
section  is  not  identified  in  the  manner  required  by  the  Constitution,  the  court 
will  not  resort  to  such  other  means  of  identification,  although  the  act  intended 
would  thereby  be  ascertained  beyond  question.  It  follows  that  as  the  title  of 
said  act  of  1891,  supra,  fails  to  identify  the  section  to  be  amended  by  setting 
the  same  out  in  the  title  thereof,  as  required  by  Section  21  of  Article  4  of  the 
Constitution,  the  same  is  unconstitutional  and  void." 

Mankin  v.  Pennsylvania  Co.,  160  Ind.  at  453. 

Ill  a  yet  more  recent  case  the  title  of  the  amendatory  act  omit- 
ted from  the  title  of  the  act  sought  to  be  amended  the  following 
words:  "Providing  for  town,  city  and  county  boards  of  health, 
prescribing  penalty  for  the  violation  of  the  provisions  thereof." 
The  title  of  the  act  sought  to  be  amended  was  quite  lengthy  and 
was  otherwise  correctly  set  out  in  the  title  of  the  amendatory  act, 
but  the  court  held  the  ommission  of  the  words  quoted  to  be  fatal 
to  the  validity  of  the  amendatory  act,  saying: 

"It  is  doubtful  if  this  title  would  be  sufficient  in  an  original  act  to  sup- 
port legislation  concerning  town,  city,  and  county  boards  of  health;  and  it  is 
entirely  clear  that  in  the  office  of  identifying  a  particular  statute  relating  to 
town,  city,  and  county  boards,  for  purpose  of  amendment,  under  Article  4, 
Section  21,  of  the  Constitution,  it  must  be  held  inadequate.  The  absence  of 
the  omitted  words  from  the  title  makes  such  a  radical  restriction  and  change 
in  the  general  import  of  the  title  of  the  act  of  1891  that  we  cannot  attribute 
it  to  a  clerical  error,  as  is  suggested." 

Hendershot  v.  State,  162  Ind.  at  72. 

The  failure  of  the  present  bill  to  set  out  in  the  title  any  sub- 
stantial part  of  the  act  sought  to  be  amended,  brings  it  so  clearly 
within  the  inhibition  of  the  Constitution  that  the  question  does  not 
admit  of  argument.  I  am  therefore  compelled  to  withhold  my 
approval. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


335 
HOUSE  BILL  No.  201. 


MARCH  5,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  201  without  executive  ap- 
proval. 

The  first  section  of  the  bill  authorizes  the  assessment  of  the 
property  of  counties,  townships,  towns,  cities  and  municipalities, 
for  the  cost  of  public  improvements  in  proceedings  for  the  con- 
struction of  such  improvements  hereafter  begun,  and  makes  the 
same  a  lien  upon  the  property  of  such  municipalities. 

There  is  doubt  in  my  mind  as  to  the  propriety  of  a  law  creating 
a  lien  against  any  public  property,  but  if  this  section  of  the  bill 
stood  alone  I  wrould  not  refuse  approval. 

The  second  section  of  the  bill  goes  far  beyond  that  purpose. 
It  legalizes  all  payments  heretofore  made  by  any  such  municipali- 
ties in  any  such  proceeding.  It  then  goes  yet  a  step  further,  and 
legalizes  all  assessments  made  in  any  such  proceeding  where  pay- 
ment has  not  been  made,  and  makes  the  same  a  lien  upon  all  public 
properties  abutting  any  such  improvement. 

It  is  impossible  for  the  Legislature  or  for  the  Executive  to 
know  the  details  of  the  many  proceedings  for  the  construction  of 
such  public  improvements  heretofore  instituted.  In  the  absence  of 
such  knowledge  we  can  not  judge  of  the  merits  of  the  claims  grow- 
ing out  of  such  proceedings. 

The  bill  exempts  pending  litigation,  but  I  am  advised  that  there 
are  a  number  of  instances  in  the  State  where  disputes  exist  concern- 
ing the  merits  of  some  of  these  claims,  in  which  litigation  has  not 
yet  been  commenced. 

The  General  Assembly  has  no  legal  or  moral  right  to  pass  upon 
the  validity  of  such  claims.  The  determination  of  such  disputes 
is  peculiarly  within  the  jurisdiction  of  the  judicial  department  and 
wholly  outside  the  domain  of  the  Legislature. 

All  such  contracts  were  entered  into  by  the  persons  holding 
them  with  full  knowledge  of  the  law  as  it  at  the  time  existed.  Such 
persons  made  their  contracts  with  full  knowledge,  and  they  now 
have  no  right  to  ask  this  General  Assembly  to  make  a  new  contract 
for  them.  Some  of  their  claims  may  be  meritorious ;  if  so,  the 
courts  will  so  decide. 

Validating  acts  should  always  be  scanned  with  care,  and  should 


336 

receive  favorable  consideration  only  when  it  is  clear  that  no  sub- 
stantial rights  will  be  affected  thereby. 

There  is,  it  seems  to  me,  no  process  of  reasoning  by  which  an 
act  can  be  justified  which  creates  a  lien  upon  public  property  be- 
cause of  a  past  transaction,  where  none  exists  by  reason  of  the  law 
now  in  force. 

Very  respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  79. 

MARCH  7,   1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  am  unable  to  give  executive  approval  to  House  Bill  No.  79. 
I  therefore  respectfully  return  the  same  to  you,  together  with  my 
objections  thereto. 

The  bill  seeks  to  repeal  the  metropolitan  police  law,  under 
which  the  police  departments  of  the  cities  of  Anderson,  Elkhart, 
Elwood,  Hammond,  Jeffersonville,  Kokomo,  Lafayette,  Logans- 
port,  Marion,  Michigan  City,  Muncie,  New  Albany,  Richmond  and 
Vincennes  are  now  administered.  It  divests  the  Governor  of  au- 
thority to  appoint  police  commissioners  for  these  cities,  and  de- 
volves the  power  to  make  such  appointments  upon  the  mayors  and 
common  councils  of  such  cities. 

The  advocates  of  the  measure  contend  that  the  right  of  the  city 
to  self-government  is  fundamental  and  absolute;  that  the  State 
has  no  right  to  interfere  in  its  affairs ;  that  to  do  so  is  to  do  vio- 
lence to  the  spirit  of  our  institutions,  if  not  to  the  letter  of  the 
Constitution  itself;  that  the  people  of  each  municipality  know 
what  they  want,  and  are  entitled  to  free  rein  to  administer  their 
own  affairs,  in  their  own  way,  and  to  suit  their  own  desires ;  that 
the  present  law,  in  so  far  as  it  vests  in  the  Chief  Executive  of 
the  State  the  power  to  appoint  members  of  the  boards  of  police 
commissioners  in  the  several  cities  named,  invades  this  sacred  and 
long-established  principle  and  ought  to  be  repealed. 

Much  else  has  been  said  and  much  noisy  declamation  indulged 
in,  but  this  constitutes  the  only  argument  made  in  behalf  of  the 
bill  worthy  of  respectful  consideration.  All  else  is  beside  the  is- 
sue, and  is  unworthy  of  this  forum. 

This  argument,  however  sincere  its  advocates  may  be  and  how- 


337 

ever  eloquently  it  may  be  presented,  is  based  upon  an  erroneous 
conception  of  both  the  spirit  of  our  institutions  and  the  letter  of 
the  Constitution. 

Ours  is  neither  a  despotism  nor  a  democracy,  but  a  representa- 
tive government.  Our  fathers  never  intended  that  it  should  be  a 
despotism  or  a  democracy.  They  intended  that  it  should  be  a* rep- 
resentative government,  with  barriers  and  limitations  sufficient  in 
number  and  in  strength  to  protect  us  from  the  perils  of  both.  In 
forming  the  National  government  they  made  it  supreme  in  all  mat- 
ters vital  to  its  own  existence  or  affecting  the  interests  of  all  people. 
In  matters  involving  the  interests  of  the  people  of  the  several  States 
and  relating  exclusively  to  their  own  domestic  affairs,  the  States 
were  made  sovereign.  The  National  government  reserves  to  itself 
the  enforcement  of  its  laws  everywhere  throughout  its  borders. 
That  responsibility  is  never  committed  to  the  States.  The  time 
was  when  some  of  the  people  of  the  Union  did  not  understand  or 
accept  this  theory  of  the  Federal  government.  Calhoun  never  un- 
derstood it  or  accepted  it,  but  Andrew  Jackson  did  and  had  the 
courage  to  enforce  it,  and  Abraham  Lincoln  understood  it  and  en- 
forced it  at  frightful  cost  of  blood  and  treasure. 

In  forming  our  State  government  our  fathers  did  not  intend 
that  it  should  be  composed  of  "a  coterie  of  independencies,  with  a 
body  of  local  laws,  like  so  many  countries  palatins,"  each  sovereign 
within  itself.  They  had  before  them  the  National  Constitution  and 
the  Constitutions  of  many  sister  States.  They  understood  the 
form  and  theory  of  free  government  as  instituted  upon  this  con- 
tinent, and  they  made  no  such  mistake  as  that.  They  made  the 
government  what  they  intended  it  to  be,  what  it  should  be,  aye, 
what  it  is — a  single  entity — a  unity — sovereign  throughout  its  bor- 
ders on  all  subjects  of  common  interest,  taking  care  to  provide  in 
the  fundamental  law  itself  that  its  laws  should  run  throughout  its 
borders  and  should  never  be  suspended  except  by  authority  of  the 
General  Assembly/5  They  declared  in  that  instrument  that  "No 
law  shall  be  passed,  the  taking  effect  of  which  shall  be  made  to  de- 
pend upon  any  authority  except"  as  therein  provided.  In  framing 
the  government  they  knew  there  were  certain  things  which  they 
could  not  trust  to  the  choice  of  the  several  municipalities  of  the 
commonwealth  they  were  creating,  such  as  the  levying  and  collec- 
tion of  the  State's  revenues,  the  establishment  and  preservation  of 
the  common  school  fund,  the  establishment  of  a  uniform  system  of 
common  schools,  and  the  exercise  of  the  police  power. 

They  believed,  without  reservation,  "that  all  power  is  inherent 
[22—19891] 


338 

in  the  people,"  and  so  declared.  But  they  knew  that  many  essen- 
tial powers  must  be  surrendered  by  them  and  delegated  to  the  State 
they  were  creating  to  be  exercised  by  it  as  a  sovereign  within  cer- 
tain defined  and  prescribed  limitations,  if  a  truly  representative 
form  of  government  was  to  be  established.  They  therefore  pro- 
vided for  departments  of  government,  legislative,  executive  and 
judicial,  made  each  co-ordinate  and  independent  of  the  other,  ex- 
cept as  in  the  Constitution  provided,  and  invested  them  with  every 
power  necessary  to  the  accomplishment  of  the  duties  devolved  upon 
them. 

The  government  thus  created  was  instituted  "by  the  people  of 
the  State  *  *  *  for  their  peace,  safety  and  well-being." 
Every  power  necessary  to  preserve  this  purpose  was  by  them  dele- 
gated to  the  government  they  created. 

One  of  the  fundamental  and  essential  powers  vested  in  the 
State  is  the  right  to  enforce  its  laws  everywhere  throughout  its 
borders,  in  every  county,  in  every  city,  in  every  town,  in  every 
hamlet,  and  in  every  township.  The  right  to  enforce  its  laws  car- 
ries with  it  the  right  to  select  all  necessary  instruments  and  means 
for  their  enforcement.  This  is  fundamental. 

It  foUows,  therefore,  logically  and  necessarily,  that  the  law 
clothing  the  Chief  Executive  with  the  power  to  appoint  police 
commissioners  to  administer  the  police  departments  of  the  cities  of 
the  State  contravenes  neither  the  letter  of  the  Constitution  nor 
the  spirit  of  our  institutions;  but,  on  the  contrary,  it  is  clearly 
within  the  letter  of  the  one  and  in  harmony  with  the  other. 

Indeed,  one  of  the  two  fundamental  purposes  for  which  mu- 
nicipal corporations  are  instituted  is,  that  they  "as  state  govern- 
mental agencies"  may  "assist  the  State  in  their  localities  in  the  ad- 
ministration and  execution  of  such  laws  as  pertain  to  the  people  of 
the  State  at  large." 

This  is  so  clearly  and  forcefully  put  by  Mr.  Justice  Hadley 
of  the  present  Supreme  Court,  in  an  opinion  passing  upon  the 
constitutionality  of  one  of  the  metropolitan  police  acts,  that  I  am 
impelled  to  submit  what  he  says  for  your  consideration : 

"There  are  important  powers  delegated  to  municipalities  which  concern 
every  citizen  of  the  State,  and  for  the  proper  exercise  of  which  the  State  can- 
not abdicate  responsibility  by  committing  them  to  local  officers. 

"It  is  very  clear  from  the  tenor  of  the  whole  instrument  that  the  Consti- 
tution makers  never  intended  that  the  territorial  divisions  recognized — that  is, 
counties,  townships,  and  towns,  should  govern  themselves,  independently  of 
State  supervision  or  of  State  supremacy,  but  in  every  matter  which  affects  the 
safety,  morals,  health,  or  general  welfare  of  the  people  at  large,  or  of  a  con- 


siderable  number  of  them,  there  is  undoubtedly  reserved  in  the  State  the 
power  to  supervise,  control,  and  even  coerce,  local  officers  in  the  discharge  of 
public  duties,  and  even  to  send  its  own  agents  into  any  organized  district, 
if  necessary,  to  enforce  a  public  right,  or  accomplish  a  public  benefit.  .  *  *  * 
"The  enforcement  of  the  State's  criminal  and  revenue  laws  are  of  equal 
importance  to  all.  In  all  these,  and  kindred  things,  the  setting  up  of  corpora- 
tion lines  forms  no  harrier  to  the  strong  arm  of  the  State  in  safeguarding 
every  public  interest." 

State  v.  Fox,  158  Ind.  at  136. 

In  another  case  involving-  the  constitutionality  of  the  metropoli- 
tan police  act  of  1891,  Mr.  Justice  Elliott,  speaking  for  the  Su- 
preme Court,  said : 

"The  act  here  assailed  does  not  trench  upon  the  right  of  local 

self-government.  In  providing  for  the  appointment  of  officers  con- 

nected with  the  constabulary  of  the  State,  there  is  not  an  invasion  of  the  right 
of  local  self-government,  but  simply  the  exercise  of  the  power  to  provide  for 
the  selection  of  peace  officers  of  the  State." 

State  v.  Kolsem,  130  Ind.  at  437. 

And  finally,  within  the  last  thirty  days,  while  the  present  law 
was  being  denounced  upon  the  floor  of  this  Assembly  as  uncon- 
stitutional and,  therefore,  an  illegal  invasion  of  popular  rights, 
the  same  court,  through  Mr.  Justice  Gillctt,  handed  down  a  deci- 
sion, in  which  the  constitutionality  of  the  law  is  redeclarcd  in  the 
following  decisive  words : 

"The  maintenance  of  peace  and  quiet  and  the  suppression  of  crime  and 
immorality  are  matters  of  general  interest,  and  to  the  attainment  of  these 
ends  the  cities  and  towns  of  the  State  are  legally  subject  to  its  control. 

"As  the  Commonwealth  is  a  unity  in  respect  to  its  interests  in  such  matters, 
the  regulation  thereof  is  a  proper  subject  of  legislation.  *  *  *  Matters  of 
general  interest  are  not  necessarily  required  to  be  submitted  to  the  judgment 
and  discretion  of  the  people  of  the  locality.  *  *  *  The  essential  elements 
of  what  is  known  as  the  metropolitan  police  system  in  the  government  of 
municipal  corporations  have  been  so  often  vindicated  as  against  constitutional 
objections  that  the  question  should  now  be  considered  at  rest." 
Arnett  v.  State,  No.  20,748. 

The  enforcement  of  the  laws  of  the  State  vitally  concerns  all 
the  people.  This  is  as  true  of  the  laws  touching  public  morals  as 
it  is  of  the  laws  relating  to  the  greater  crimes,  such  as  murder, 
rape,  arson  or  burglary. 

Gambling,  drunkenness,  licentiousness  and  kindred  crimes  de- 
stroy public  morals,  degrade  citizenship,  impair  the  health  of  the 
people  and  lead  to  profligacy  and  dependency.  And,  in  the  end, 
the  public  purse  is  taxed  either  to  support  the  victims  of  these 
vices  as  paupers  or  to  punish  them  as  felons,  Taxation  to  meet 


340 

the  expense  of  pauperism  and  crime  falls  upon  all  the  people.  The 
tendency  of  both  is  to  destroy  the  "peace,  safety  and  well-being  of 
the  people,"  to  secure  which  the  Constitution  was  adopted  and  this 
free  government  established.  To  say  that  the  State  may  not  legally 
or  with  propriety  put  its  hand  upon  the  causes  which  produce  them, 
with  a  view  of  minimizing  or  entirely  ending  such  causes,  is  to 
deny  the  State  the  power  to  preserve  itself  or  to  accomplish  the 
purposes  for  which  it  was  created. 

While  every  community  should  govern  itself,  when  it  fails,  or 
to  tl^e  extent  that  it  fails,  to  do  so,  the  State  has  a  right  to  inter- 
fere. Indeed,  in  any  such  case  it  becomes  its  solemn  duty  to  inter- 
vene and  end  the  violation  of  its  laws. 

That  some  of  the  cities  now  subject  to  the  operations  of  the 
law  sought  to  be  repealed  have  signally  failed  in  this  regard,  is  a 
notorious  fact,  a  part  of  the  history  of  the  State  and  of  the  times. 
In  one  city  in  particular,  officials  now  in  authority  are  themselves 
engaged  in  the  retail  sale  of  intoxicating  liquors  and  are  not  in- 
frequently violators  of  the  law  relating  thereto.  One  of  them  is 
now  running  a  dive  known  as  the  "Bucket  of  Blood,"  because  of  the 
many  crimes  there  committed.  Can  it  be  said  that  the  police  de- 
partment of  such  a  city  may  be  safely  turned  over  to  him  and  his 
associates  ?  Has  the  State  no  concern  in  such  case  ?  Have  the  peo- 
ple of  a  city  anywhere  within  the  Commonwealth  a  right  to  daily 
and  openly  transgress  the  law  and  suspend  its  operation?  If  they 
do  thus  violate  the  law  and  suspend  its  operation,  has  the  State  no 
interest  in  the  condition  thus  created?  Is  the  State  an  impotent, 
helpless  thing,  compelled  to  sit  supine  while  its  laws  are  broken  and 
its  authority  trampled  under  foot?  These  questions  it  seems  to  me 
suggest  their  own  answers.  Indeed,  the  doctrine  embraced  in  a  neg- 
ative answer  to  any  one  of  them  is  so  monstrous  as  to  be  undebatable. 
There  is,  there  can  be,  no  escape  from  the  conclusion  that  the 
whole  people  are  interested  in  such  matters  and  that  all  are  pro- 
foundly and  vitally  concerned. 

That  this  is  true,  I  call  to  witness  recent  history.  Last  year 
the  people  of  the  whole  State  were  concerned  and  shocked  by  the 
revelations  made  of  conditions  existing  at  French  Lick  and  West 
Baden.  These  conditions  were  such  as  to  shame  the  Commonwealth 
and  bring  upon  it  just  criticism  from  the  press,  both  at  home  and 
in  sister  States.  The  demand  that  these  conditions  should  cease 
was  general  and  imperative,  and,  in  my  judgment,  properly  so. 
The  people  of  that  community,  however,  preferred  that  such  con- 
ditions continue.  They  were  satisfied  to  keep  the  profit  and  the 


341 

shame  that  flowed  from  them.  They  were  willing  that  the  criminal 
laws  relating  thereto  should  continue  to  be  suspended.  But  the 
State  was  not  satisfied,  and  their  fellow-citizens  were  not  satisfied. 
And  yet,  if  the  doctrine  contended  for  by  the  adherents  of  this  bill 
is  correct,  either  from  the  standpoint  of  law  or  of  public  policy, 
the  people  of  that  community  had  a  right  to  say  to  the  State  and 
to  their  fellow-citizens,  "Keep  your  hands  off.  We  are  entitled  to 
govern  ourselves.  You  shall  not  interfere.  To  do  so  is  to  violate 
the  Constitution  and  invade  the  spirit  of  free  institutions." 

Again,  a  gambling  establishment  was  instituted  at  Dearborn 
Park,  in  Lake  County,  within  a  stockade,  in  a  rural  community, 
where  a  thousand  dissolute  and  profligate  characters  daily  assem- 
bled in  violation  of  the  law.  The  place  became  notorious.  The 
Executive  called  upon  the  local  officials — the  sheriff  and  the  prose- 
cuting attorney  of  Lake  County — to  enforce  the  law,  but  they 
would  do  nothing.  Then,  under  a  provision  of  the  metropolitan 
police  law  authorizing  the  police  department  of  a  city  to  be  used 
to  suppress  violations  of  the  law  anywhere  within  the  boundaries 
of  the  county,  the  Executive  directed  the  police  department  of  the 
city  of  Hammond  to  be  ready  to  swear  in  a  sufficient  number  of 
special  policemen  to  put  an  end  to  the  gambling  institution  at 
Dearborn  Park,  and  advised  those  who  were  conducting  it  that 
the  violation  of  the  law  must  cease,  and  that  if  the  police  officers 
were  resisted  the  militia  of  the  State  would  be  sent  to  their  support. 
This  led  to  the  immediate  and  unconditional  abandonment  of  the 
stockade  and  ended  the  unlawful  practices  that  had  been  conducted 
there.  But  under  the  doctrine  of  "home  rule"  contended  for  by 
the  supporters  of  this  bill  the  State  had  no  right  to  interfere  if 
the  people  of  Lake  County  were  content. 

As  before  suggested,  the  Constitution  provides  that  "the  opera- 
tion of  the  laws  shall  never  be  suspended,  except  by  the  authority 
of  the  General  Assembly" ;  that  "no  law  shall  be  passed,  the  taking 
effect  of  which  shall  be  made  to  depend  upon  any  authority  except 
as  provided  in  this  Constitution."  It  will  be  observed  that  it  no- 
where appears  in  the  Constitution  that  the  citizens  of  any  com- 
munity may  suspend  the  law  or  that  its  taking  effect  shall  depend 
upon  their  will.  The  Supreme  Court  of  the  State  has  held  the 
term  "operation  of  the  laws,"  as  used  in  the  Constitution,  to  mean 
the  "taking  effect  and  continuing  in  force"  of  the  laws. 

In  that$  the  State,  acting  through  the  General  Assembly,  is 
sovereign.  This  is  fundamental.  It  must  needs  be  so. 

That  its  laws  may  be  enforced,  the  Constitution  imposes  upon 


.•ML! 

the  Governor  solemn  care  in  that  regard.  Its  words  are :  "He  shall 
take  care  that  the  laws  be  faithfully  executed."  The  present  Kx- 
ecutive  has  accepted  these  provisions  of  the  Constitution  in  good 
faith.  He  has  believed,  and  still  believes,  it  was  intended  that 
he  should.  When  the  people  become  satisfied  that  that  provision  of 
the  Constitution  is  a  mistake,  let  them  meet  in  their  sovereign  ca- 
pacity, strike  it  from  their  organic  law,  and  insert  the  contrary. 
Then  the  Executive  will  be  free  of  responsibility. 

Acting  through  the  several  police  boards  in  the  fourteen  cities 
included  in  the  existing  law,  the  Executive  has  consistently  sought 
to  secure  the  law's  substantial  enforcement  within  their  boundaries. 
In  the  last  two  years  great  progress  has  been  made  in  this  direc- 
tion. Taken  as  a  whole,  these  police  departments  have  been  better 
administered  and  the  laws  more  impartially  and  consistently  en- 
forced than  ever  before  in  their  history.  The  effect  of  the  policy 
pursued  in  these  cities  has  been  beneficial  throughout  the  State.  It 
has  acted  as  a  call  to  cities  not  within  the  metropolitan  police  law 
to  the  better  performance  of  official  obligation  and  to  the  accept- 
ance of  higher  ground  in  the  administration  of  their  police  affairs. 
These  facts  are  written  in  the  history  of  the  past  two  years,  and 
no  amount  of  invective,  calumny  or  abuse  can  change  them.  They 
are  a  part  of  the  history  of  the  State.  They  are  not  to  be  rea- 
soned away. 

At  such  a  time  and  under  such  circumstances,  it  is  proposed  to 
strike  down  the  law  that  makes  this  possible ;  to  turn  these  depart- 
ments over  to  local  influences  whose  only  grievance  against  the  law 
is  that  under  it  the  laws  of  the  State  touching  public  morals  have 
been  enforced;  to  subject  these  departments  to  the  temptations 
and  exigencies  of  local  politics ;  to  put  them  up  as  prizes  to  be 
striven  for  by  those  who  wish  the  law's  lax  enforcement  or  its  en- 
tire suspension. 

The  matter  of  the  repeal  of  this  law  is  of  wider  and  far  greater 
significance  than  the  simple  repeal  of  a  statute,  and  its  consequences 
more  vital.  It  is  really  a  test  of  strength  between  the  moral  forces 
of  society  on  the  one  side  and  the  law  defying  forces  of  vice  and 
crime  on  the  other.  Its  repeal  will  mean  a  "wide-open"  policy  in 
these  fourteen  cities.  Vice  and  evil,  for  a  time  repressed,  will  find 
in  it  warrant  for  unwonted  excesses  and  will  become  more  difficult 
of  control  and  regulation.  Cities  not  now  under  the  law  will  be 
affected,  and  the  ground  gained  in  behalf  of  good  morals  and  de- 
cent administration  of  government  in  the  last  two  years  will  be 
largely  lost. 


343 

The  present  law,  in  some  form,  has  been  upon  the  statute  books 
of  the  State  since  1883,  a  period  of  24  years.  It  ought  not  now 
to  be  repealed  for  light  or  transient  reasons.  We  have  shown  that 
it  does  not  contravene  the  Constitution  or  violate  the  spirit  of  our 
institutions.  The  contention  that  it  does  is  without  foundation 
and  has  been  used  only  to  excite  popular  prejudice. 

The  shibboleths  of  "home  rule"  and  "self-government"  are 
alluring  and  seductive.  They  constitute  an  enticing  battle-cry. 
They  are  specious  calls  to  prejudices  strong  and  long  imbedded, 
and  are  often  used  to  obscure  a  lack  of  merit  and  a  wickedness  of 
purpose  which,  if  not  concealed,  would  bring  swift  and  sure  defeat 
and  condemnation.  In  the  present  instance  they  are  but  a  pretense, 
a  mask,  a  cloak,  beneath  which  are  marshaled  the  real  enemies  of 
free  government  in  Indiana. 

I  freely  grant  the  sincerity  of  those  who  believe  in  the  mistaken 
doctrine  that  the  existing  law  violates  the  spirit  of  our  institutions. 
But  these  are  few  in  number  compared  with  those  who  are  imbued 
with  other  purposes.  Every  brewery  and  distilling  interest  in  the 
State  is  back  of  this  bill ;  every  gambler,  every  midnight  marauder, 
every  keeper  of  a  saloon,  of  a  brothel,  of  a  wine-room ;  every  fre- 
quenter of  a  bawdy  house;  all  who  are  opposed  to  the  just  and 
fair  enforcement  of  the  laws  touching  public  morals,  or  who  claim 
for  themselves  the  right  to  choose  what  laws  they  will  obey.  These 
have  met  in  more  than  one  city  since  this  measure  was  introduced, 
in  secret  conclave,  and  there  levied  assessments  and  collected 
moneys  with  which  to  prosecute  this  fight.  With  the  repeal  of  the 
present  law  they  see  open  to  them  in  these  fourteen  cities  inviting 
fields,  containing  an  aggregate  population  of  250,000  people, 
where  the  laws  touching  public  morals  will  be  either  feebly  enforced 
or  their  operation  entirely  suspended.  They  see  opportunity  for 
the  return  of  slot  machines,  the  re-establishment  of  wine-rooms, 
gambling  joints  and  bawdy  houses ;  the  return  of  saloons  with  un- 
closed doors,  where  intoxicating  liquors  may  be  sold  on  Sundays, 
on  legal  holidays,  at  unlawful  hours,  to  minors  and  to  drunken 
men,  without  fear  of  punishment. 

These  represent  the  real  enemies  of  the  State.  They  are  al- 
ready ratifying  the  repeal  of  this  statute  with  acclamations  of  ap- 
proval and  delight.  The  act,  however,  is  not  yet  completed.  There 
is  still  time  for  reconsideration.  It  is  well  that  you  stop  and  think 
before  you  take  the  final  step ;  that  you  consider  and  make  sure 
that  the  deed  when  done  can  be  justified  in  character  of  intent  and 
result;  that  it  will  stand  the  sober  second  thought  of  the  public 


344 

after  the  excitement  of  the  hour  has  passed  away,  the  pressure  of 
the  moment  has  been  lifted,  and  the  passion  engendered  by  the 
heat  of  debate  has  closed ;  that  it  will  square  itself  with  the  crystal- 
lized and  enduring  judgment  of  the  people  whose  servants  you  are. 
If  you  repeal  it,  the  responsibility  must  be  yours  and  yours 
alone.  I  will  bear  no  share  of  it.  You  may  march  with  the  ene- 
mies of  the  State  if  you  like.  You  may,  if  you  choose,  make  fel- 
lowship with  the  saloon-keeper,  the  brewer,  the  dive-keeper  and  the 
gambler,  but  I  prefer  to  cast  my  lot  with  the  law-abiding,  with  the 
friends  of  the  home,  of  the  family  circle  and  of  orderly  govern- 
ment honestly  administered. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  456. 


MARCH  7,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives : 

I  return  herewith,  unsigned  and  without  my  approval,  House 
Bill  No.  456,  entitled,  "A  bill  for  an  act  entitled  an  act  provid- 
ing for  the  issuing  of  bonds  and  coupons  of  the  State  of  Indiana 
for  the  liquidation  and  payment  of  the  claim  of  the  board  of  trus- 
tees for  the  Vincennes  University  against  the  State,  in  full  and 
final  settlement  of  said  claim  and  all  other  demands." 

I  regret  exceedingly  that  I  am  unable  to  give  my  assent  to  this 
legislation.  Vincennes  University  is  the  oldest  institution  of  learn- 
ing in  the  State.  Its  career  has  been  long  and  honorable.  It  was 
founded  before  the  Commonwealth  was  organized.  Its  life  has  been 
one  of  vicissitudes.  It  has  come  up  "through  much  tribulation." 
Its  present  trustees  are  and  have  long  been  my  personal  friends 
and  supporters,  and  I  would  that  I  could  give  executive  approval 
to  the  demand  it  makes.  But,  after  long  consideration  and  thrice- 
repeated  investigation,  I  find  my  mind  coerced  to  a  different  con- 
clusion. The  facts  and  the  law  compel  adverse  decision.  I  can  not 
sign  it  without  being  false  to  my  sense  of  duty  and  official  obliga- 
tion. I  therefore  return  it.  It  is  due  your  honorable  body,  the 
University  and  the  public  that  I  give  the  reasons  which  impel  me 
to  this  action. 

The  bill  provides  for  the  issuing  by  the  State  of  $120,548  of 
bonds,  bearing  3  per  cent,  semi-annual  interest,  payable  to  "The 


345 

board  of  trustees  for  the  Vincennes  University"  ten  years  from 
the  date  thereof.  The  alleged  claim  of  the  University  grows  out 
of  transactions  occurring  more  than  a  half-century  ago. 

In  1804  the  United  States  Congress  granted  to  the  Territory 
of  Indiana,  for  the  use  of  a  "seminary  of  learning,"  23,040  acres 
of  lands,  which  were  subsequently  located  in  Gibson  County.  In 
1 806  an  act  of  the  Territorial  Legislature  incorporated  the  Univer- 
sity of  Vincennes  and  named  a  board  of  trustees.  This  board,  by 
the  terms  of  the  act  of  incorporation,  was  "authorized  to  sell, 
transfer,  convey  and  dispose  of  any  quantity  not  exceeding  4,000 
acres  of  the  lands"  so  granted  "for  the  purpose  of  putting  into 
immediate  operation  the  State  University,  and  to  lease  or  rent 
the  remaining  part  of  said  township  to  the  best  advantage  for  the 
use  of  the  said  public  school  or  university." 

The  board  of  trustees  named  organized  in  1807,  and  subse- 
quently sold  4,000  acres  of  said  lands  and  erected  a  building  at 
Vincennes  for  the  use  of  the  University. 

In  1824,  by  an  act  of  the  General  Assembly,  the  University 
was  "adopted  as  the  county  seminary  of  Knox  County,"  and 
placed  "under  the  direction  and  control  of  the  board  of  trustees  of 
said  University." 

The  preamble  of  this  act  makes  the  following  reference  to  the 
building  theretofore  erected  by  the  board  of  trustees:  "Said 
building  is  rapidly  decaying  for  want  of  funds  to  repair  the 
same,"  and  the  second  section  of  the  act  provides  that  "the  funds 
due  the  public  seminary  of  Knox  County  be  paid  to  said  board  of 
trustees  for  repair  of  buildings  and  to  maintain  school." 

After  the  enactment  of  this  law  there  is  no  further  record  of 
the  meetings  or  proceedings  of  the  board  of  trustees  until  after 
the  enactment  of  a  law  in  1838  reviving  such  board.  The  pre- 
amble of  this  act  recites  that  "it  is  reported  that  from  neglect  to 
supply  the  vacancies  occasioned  by  death  or  removal  from  the 
State,  in  the  board  of  trustees  of  said  University,  it  is  now  doubted 
whether  a  lawful  board  of  trustees  can  be  assembled." 

By  a  joint  resolution  of  the  General  Assembly,  approved  Jan- 
uary 22,  1820,  a  superintendent  of  the  19,040  acres  of  said  lands 
remaining  unsold  was  appointed  and  authorized  to  rent  the  same 
and  to  "collect  all  arrears  of  rent  that  may  be  due  the  State."  So 
far  as  I  have  beene  able  to  learn,  this  was  the  first  act  of  the  Gen- 
eral Assembly  asserting  ownership  of  these  lands  on  behalf  of  the 
State. 

In  1822  an  act  was  passed  providing  for  the  sale  of  the  lands 


346 

and  appointing  a  commissioner  to  superintend  the  same.  In  1824 
a  further  act  was  passed  appointing  a  superintendent  of  said 
lands. 

Under  these  acts  the  State  took  possession  of  the  lands  and 
sold  from  time  to  time  16,840  acres  of  the  same,  leaving  2,200 
acres  unsold  and  still  in  its  possession.  No  protest  or  remonstrance 
by  the  board  of  trustees  against  these  acts  of  the  State  are  in  evi- 
dence, and  no  action  was  taken  by  them  to  recover  the  lands  sold 
until  1843,  when  suits  were  begun  against  the  several  purchasers 
thereof  for  their  recovery. 

These  suits  were  the  source  of  much  contention  and  great  ex- 
citement, and  feeling  among  the  defendants  thereto  became  so 
high  that  in  1846  the  trustees  of  the  University  importuned  the 
General  Assembly  to  pass,  and  finally  secured  the  enactment  of  a 
law  authorizing  them  to  bring  suit  against  the  State  "for  the  pur- 
pose of  trying  the  right  of  the  said  board  of  trustees  to  said  town- 
ship of  lands,"  in  the  Marion  Circuit  Court,  giving  the  said  court 
"full  and  complete  jurisdiction  to  try  said  suit  between  the  said 
parties,"  and  that  "the  final  decision  of  said  action,  whether  in 
favor  of  or  against  said  board  of  trustees,  shall  be,  final  and  con- 
clusive in  the  premises,  reserving,  however,  to  each  of  the  parties 
to  said  suit  the  right  to  appeal  as  in  other  cases,"  and  providing 
"that  if,  upon  the  final  hearing  of  said  suit,  the  same  shall  be  de- 
cided in  favor  of  said  board  of  trustees  for  the  Vincennes  Univer- 
sity, upon  said  board  of  trustees  relinquishing  to  the  State,  for 
the  use  and  benefit  of  the  purchasers  thereof,  so  much  of  said 
township  of  land  as  the  State  hath  sold,  then,  and  in  that  case, 
there  shall  be  set  apart  for  said  board  of  trustees,  the  funds  arising 
from  the  sale  of  said  township  of  lands,  as  also  the  amount  yet 
due  from  the  respective  purchasers  thereof." 

The  trustees  of  the  University  availed  themselves  of  the  right 
created  by  this  act  and  began  a  suit  in  said  court  against  the  State, 
which  tereminated  in  a  judgment  against  the  State  May  21,  1849. 

By  this  decree  the  University  was  given  a  judgment  on  account 
of  principal  and  interest  received  by  the  State  for  such  of  said  lands 
as  were  sold  up  to  December  3,  1847,  in  the  sum  of  $30,099-96, 
on  account  of  moneys  still  due  the  State  from  purchasers  of  said 
land  on  December  3,  1847,  $13,249.19;  on  account  of  interest  on 
moneys  held  by  the  State  from  the  date  of  filing  the  suit  to  May 
21,  1849,  $5,428.87;  a  total  of  $48,778.02,  and  Hu>  costs  of  I  lu- 
ll tigat  ion. 

This  decree  among  other  things  provided  "That  on  compliance 


347 

with  the  terms  of  the  said  act  of  the  Legislature,  that  is  so  soon 
fis  the  complainants  shall  file  in  the  office  of  the  Auditor  of  State 
a  relinquishment,  under  their  common  seal,  to  the  State  of  Indi- 
ana, for  the  use  of  the  purchasers  from  the  State  of  the  lands  in 
the  said  township,  of  and  for  all  the  right  of  the  complainants  of 
and  to  the  lands  so  sold,  then  the  said  sum  of  $30,099.96  so  paid 
into  the  treasury  as  aforesaid  shall  be  forthwith  set  apart  by  the 
Auditor  of  State  and  Treasurer  of  State,  and,  with  all  the  interest 
which  from  the  date  of  this  decree  may  accrue  thereon,  shall,  by  the 
said  officers,  be  paid  to  the  complainants.  And  then,  also,  the  said 
officers  shall  transfer  to  the  complainants  the  evidences  or  security 
for  the  said  sum  of  $13,249.19  due  as  aforesaid  on  the  3d  day  of 
December,  1847,  or,  if  any  part  thereof  or  any  interest  thereon 
shall  have  been  paid  into  the  State  Treasury  since  the  said  3d  day 
of  December,  1847,  the  said  officers  shall  pay  over  the  said  money 
and  transfer  the  balance  as  aforesaid. 

"And  it  is  further  ordered,  adjudged  and  decreed  that  on  filing 
the  relinquishment  aforesaid,  the  complainants  are  entitled  to  have 
and  receive  from  the  said  State  the  amount  of  interest  aforesaid, 
to  wit:  The  sum  of  $5,428.87,  with  interest  thereon  from  this 
date  until  paid,  to  be  paid  in  such  manner  as  by  law  may  be  pro- 
vided." 

It  is  important  at  this  point  to  give  consideration  to  the  fact 
that  this  decree  and  judgment  of  the  Marion  Circuit  Court  was  a 
complete  and  final  adjudication  of  the  rights  of  both  the  State  and 
the  University  as  to  all  the  lands  sold  prior  to  the  beginning  of 
the  suit,  December  3,  1847.  The  judgment  required  payment  by 
the  State  of  all  money  received  on  account  of  any  such  sales  prior 
to  said  date,  the  turning  over  to  the  University  of  all  securities  for 
moneys  due  the  State  and  unpaid  on  account  of  any  such  sales,  and 
the  payment  of  interest  on  all  such  moneys  from  the  date  of  filing 
the  suit  to  the  hour  of  the  decree.  The  law  under  which  the  suit 
was  brought  was  more  than  fair;  it  was  liberal  in  its  provisions. 
The  State,  believing  in  good  faith  that  it  had  legal  right  to  sell 
these  lands  and  that  the  title  thereto  was  vested  in  it,  appealed 
from  the  decree  of  the  Marion  Circuit  Court  to  the  Supreme  Court 
of  the  State,  and  there  obtained  a  reversal  of  such  decree.  From 
this  judgment  of  reversal  the  University  appealed  to  the  Supreme 
Court  of  the  United  States,  where,  in  1855,  the  decision  of  the 
State  Supreme  Court  was  reversed,  and  the  title  to  the  lands  in 
question  held  to  be  in  the  University. 

The  decision  of  the  United  States  Supreme  Court  reversing 


348 

that  of  the  State  Supreme  Court  was  by  a  divided  court.  The 
dissenting  opinion  was  prepared  by  Chief  Justice  Taney,  and  ap- 
peals to  me  as  being  a  sounder  exposition  of  the  law  than  the  ma- 
jority opinion.  It  is  important  here  to  give  consideration  to  the 
fact  that  the  question  of  law  involved  in  the  issue  concerning  the 
title  of  the  lands  was  so  close  as  to  cause  disinterested,  impartial  and 
able  judges  to  entertain  radical  and  irreconcilable  opinions  regard- 
ing it.  In  such  a  case,  involving  important  interests,  the  State  can 
not  be  censured  by  any  just  man  for  having  stood  upon  what 
seemed  to  its  officers  to  be  its  rights. 

By  the  decision  of  the  United  States  Supreme  Court  the  case 
was  remanded  to  the  Supreme  Court  of  the  State,  where  the  error 
of  its  former  judgment  was  corrected  and  the  judgment  of  the 
Marion  Circuit  Court  affirmed. 

The  General  Assembly  of  1855  passed  an  act,  approved  Feb- 
ruary 13,  1855,  providing  for  the  settlement  of  this  judgment. 
This  act  was  passed  at  the  request  and  in  answer  to  the  importunity 
of  the  University  and  its  friends.  This  is  evidenced  by  the  pre- 
amble itself,  which  recites : 

"Whereas,  It  is  represented  that,  for  the  purpose  of  settling  finally  all  of 
said  litigation,  as  well  as  of  assuring  to  the  said  Vincennes  University  a  safe 
investment,  the  board  of  trustees  thereof  are  willing  to  accept,  in  full  satis- 
faction of  all  their  claim  to  the  said  lands,  and  to  the  proceeds  thereof,  in 
pursuance  of  the  said  act  and  decree,  State  bonds  to  an  amount  equal  to  the 
amount  which  might  be  found  due  them,  according  to  a  fair  and  equitable  con- 
struction of  said  act  of  January  17,  1846,  that  is  to  say,  all  the  money  yet  due 
from  the  purchasers  of  said  lands,  and  all  the  money  paid  into  the  treasury 
on  account  of  the  sales  of  said  lands,  and  the  interest  which,  under  the  laws 
of  the  State,  has  accrued  thereon,  with  the  costs  of  lawsuits  and  litigation," 
as  the  basis  of  such  act. 

The  act  itself  provided  that 

"The  Auditor  and  Treasurer  of  State  forthwith  proceed  to  ascertain 
the  amount  for  principal  and  interest  equitably  due  to  the  said  trustees  for 
the  said  Vincennes  University,  by  virtue  of  said  act  of  1846,  and  of  said  de- 
cree in  equity,  and  of  the  claim  therein  set  up,  having  proper  regard  to  the 
decision  of  the  Supreme  Court  of  the  United  States  thereon,  so  that  in  no 
event  the  amount  determined  by  them  shall  be  more  than  that  allowed  by  the 
said  decree,  with  interest  thereon  and  the  costs,  the  said  interest  to  be  com- 
puted to  December  31,  1854." 

Section  2  of  the  act  provided  that 

"Auditor  and  Treasurer  shall  cause  to  be  prepared  and  issued  to  the  said, 
the  board  of  trustees  for  the  Vincennes  University,  State  bonds,  signed  by 
them  as  such  Auditor  and  Treasurer,  in  sums  of  five  and  of  one  thousand  dol- 
lars each,  with  a  like  bond  for  any  fractional  sum,  payable,  principal  and 


349 

interest,  to  the  said  board  of  trustees,  or  bearer,  at  the  State  treasury;  the 
principal  at  the  pleasure  of  the  State,  after  thirty  years  from  the  date,  and 
the  interest  at  the  rate  of  6  per  cent,  per  year,  payable  semi-annually,  on  the 
first  days  of  July  and  January  hereafter.  The  said  bonds  shall  bear  date  the 
first  day  of  January,  1855." 

Section  3  provided: 

"The  receipt  of  the  said  bonds  by  the  said,  the  board  of  trustees  of  the 
Vincennes  University  shall  be  deemed  and  taken  to  be  a  release,  in  law  and 
fact,  by  the  said  board,  to  the  State  and  to  all  persons  whatever,  of  said  de- 
cree and  of  all  right  and  claim  on  the  part  of  said  board  to  or  on  account  of 
the  lands  in  said  Gibson  Seminary  township,  sold  by  the  State,  and  to  all 
money  being  the  proceeds  thereof  or  interest  thereon,  and  to  all  costs  and 
damages  therefor,  as  fully  as  a  release,  under  their  corporate  seal,  could  in  any 
manner  operate." 

Under  the  authority  of  this  act  the  Auditor  and  Treasurer  of 
State  proceed  to  adjust  this  claim.  The  Auditor's  report  of  1855 
contains  the  following  reference  to  their  acts  in  relation  thereto : 

"For  the  purpose  of  adjusting  the  claim  of  the  Vincennes  University 
against  the  State,  on  account  of  the  appropriation  of  the  proceeds  of  the 
Seminary  township  of  Gibson  County  to  the  State  University  at  Bloomington, 
the  General  Assembly  passed  an  act,  approved  February  13,  1855,  directing 
the  Auditor  and  Treasurer  of  State  to  ascertain  the  amount  equitably  due  to 
the  trustees  of  the  Vincennes  University  by  virtue  of  a  decree  of  the  Marion 
Circuit  Court,  limiting  the  same  to  the  amount  of  the  judgment,  interest  and 
costs,  and  having  ascertained  the  amount  due  to  issue  to  the  board  of  trustees 
of  the  State  University  (Vincennes  University),  in  full  payment  of  the  same, 
State  bonds  bearing  6  per  cent,  interest,  the  principal  payable  in  thirty  years 
from  date  and  interest  payable  semi-annually  on  the  first  days  of  July  and 
January.  The  Auditor  and  Treasurer  accordingly,  as  required  by  this  act. 
investigated  the  subject  and  ascertained  the  amount  due  under  the  decree  to 
be  $66,585,  for  which  amount  bonds  of  the  description  aforesaid  were  issued 
and  delivered  to  the  parties  claiming  them  under  the  law." 
Auditor  of  State's  report,  1855,  page  17. 

In  this  settlement  the  University  participated,  by  its  counsel, 
Samuel  Judah,  a  lawyer  of  eminent  ability,  who  had  represented 
it  throughout  the  litigation  incident  to  this  claim.  Evidence  of 
this  fact  is  furnished  by  the  record  of  the  proceedings  of  the 
board  of  trustees  itself,  an  entry  therein,  under  date  of  May  19, 
1855,  containing  the  following: 

"On  motion  of  Samuel  Judah,  Resolved,  That  Mr.  Judah  forthwith  settle 
with  the  Auditor  and  Treasurer  of  State  on  the  part  of  this  board  for  the 
amount  due  this  board  from  the  State,  under  the  act  of  February  13,  1855." 

From  these  facts  it  unquestionably  appears  that  the  amount  of 
the  decree  of  the  Marion  Circuit  Court,  with  interest  upon  the  same 


B50 

to  December  31,  1854,  and  the  costs  of  the  litigation,  were  the 
basis  of  this  settlement.  That  was  what  the  act  of  1855  author- 
i/e<{  as  Hie  maximum  amount  for  which  settlement  should  he  made. 
It,  therefore,  follows  that  as  to  the  lands  sold  by  the  State  prior  to 
December  3,  1847,  the  date  of  commencing  the  suit  in  the  Marion 
Circuit  Court,  full  and  final  settlement  was  made,  after  the  rights 
of  the  parties  had  been  ascertained  by  trial  and  decree.  As  be- 
tween individuals  such  an  adjudication  and  such  a  settlement 
would  be  conclusive  and  forever  binding.  I  am  unable  to  conceive 
any  reason  why  it  should  not  be  equally  conclusive  and  binding 
upon  this  University. 

As  to  so  much  of  the  claim,  settlement  for  which  is  provided 
for  in  this  measure,  as  is  based  upon  the  lands  sold  by  the  State 
prior  to*  the  date  named,  I  am  in  full  accord  with  my  predecessor, 
who,  as  a  member  of  the  commission  especially  appointed  to  in- 
vestigate and  pass  upon  the  question,  found  himself  impelled  by 
sheer  force  of  the  law  and  facts  in  the  case,  to  decide  as  follows : 

"After  making  diligent  search  for  historical  data  and  weighing  the  mat- 
ter at  hand,  I  am  of  the  opinion  that  the  University  has  been  fully  compen- 
sated for  the  lands  taken  in  hand  and  sold  by  the  State,  applying  the  pro- 
ceeds for  the  purpose  for  which  the  township  was  set  apart  by  the  Federal 
Government,  as  well  as  making  an  accounting  to  the  University  of  Vincennes 
for  the  full  amount  of  the  lands  sold,  plus  interest  thereon  and  court  costs  in 
addition  thereto.  *  *  *  rpne  State,  as  I  have  said,  accounted  to  and  paid 
over  to  them  every  dollar  received  from  the  sale  of  the  lands,  and  I  can  not 
feel  that  there  has  been  a  dishonorable  act  on  the  part  of  the  State.  Thc_ 
State  believed  the  title  to  the  township  of  land  was  vested  in  the  State,  and 
it  could  make  such  disposition  thereof  as  was  thought  best,  keeping  in  view 
and  carrying  out  the  provisions  of  the  Government  in  setting  apart  the  land 
for  the  higher  school  of  learning." 

In  this  connection,  it  is  urged  that  while  there  is  no  legal  claim 
in  behalf  of  the.  University  against  the  State  on  account  of  the 
lands  sold  prior  to  December  3,  1847,  and  while  the  decree  and 
settlement  thereunder  is  conclusive  and  final  in  law,  the  settlement 
itself  "was  not  a  fair,  honest  or  just  settlement;"  that  it  was  "a 
settlement  on  the  State's  own  terms,  a  stand-and-deliver  settlement, 
without  equity  or  justice."  If  this  were  true,  it  would  not  change 
the  legal  aspect  of  the  case  nor  add  to  the  authority  of  the  Gen- 
eral Assembly  to  incur  a  debt  against  the  State.  It  has  no  author- 
ity to  provide  for  the  payment  of  a  debt  which  has  no  legal  exist- 
ence. But  the  statement  itself  is  without  foundation.  Both  the 
act  of  1846  and  the  act  of  1855  were  passed  in  answer  to  the  de- 
mands and  upon  the  importunity  of  the  University. 


351 

The  records  of  the  University  show  that  in  1843  the  board  of 
trustees  entered  into  a  contract  with  Mr.  Judah,  one  of  their  num- 
ber, and  their  counsel,  by  the  terms  of  which  he  was  to  prosecute 
this  claim,  and  evidence  is  not  wanting  that  he  was  earnest  and 
effective  in  his  efforts  to  secure  the  passage  of  the  act  of  1846,  au- 
thorizing the  University  to  sue  the  State.  December  17,  1854,  the 
trustees  adopted  the  following  resolution : 

"Resolved,  That  Samuel  Judah,  Thomas  Bishop  and  A.  T.  Ellis  be  a  com- 
mittee with  full  power  to  make  any  arrangement  they  may  think  proper  with 
the  Legislature  concerning  the  said  suit  and  funds,  and  in  case  of  the  absence 
of  either,  or  both  Ellis  and  Bishop,  from  Indianapolis,  Mr.  Judah  have  all 
such  power;  and  that  the  President  sign  a  copy  of  this  order: 

"Ordered:  That  said  committee,  Judah,  Ellis  and  Bishop,  be  authorized  to 
use  means,  of  the  proportion  of  said  funds  as  they  may  deem  necessary  to 
secure  a  settlement  of  these  claims." 

Subsequently,  in  a  suit  involving  his  fees  for  this  service,  Mr. 
Judah  averred  in  an  answer  to  the  complaint  of  the  trustees,  that 
lie  used  $4,500  of  the  funds  of  the  University  "in  procuring  the 
passage  of  the  act  of  1855  *  *  *  and  that  he  did  so  under 
and  by  virtue  of  the  order  of  said"  trustees.  In  their  reply  to  this 
answer  the  trustees,  to  quote  the  language  of  the  Supreme  Court, 

"Without  directly  admitting  or  denying  that  the  expenditures  so  made 
were  necessary  for  the  purposes  stated  in  the  answer,  averred  that  without  the 
consent  of  Ellis  and  Bishop,  Judah  fraudulently  and  corruptly  expended  such 
sums  in  hiring  persons  to  aid  him  (Judah)  in  influencing  members  of  the 
Legislature  and  in  bribing  members  to  procure  the  passage  of  said  act;  *  *  * 
that  the  passage  of  said  act  was  procured  by  the  joint  eiforts  of  the  friends 
of  the  State  University  and  others  who  contributed  as  much  as  defendant 
to  its  passage." 

This  statement  was  made  by  the  trustees  when  the  facts  were 
fresh  in  their  minds,  and  solemnly  written  into  their  reply  in  their 
case  against  Mr.  Judah.  I  cite  it  as  a  complete  and  final  refuta- 
tion of  the  charge  that  the  State,  in  its  sovereign  capacity,  im- 
posed a  harsh  and  undesired  settlement  upon  the  University.  If 
their  pleading  is  true,  the  representatives  of  the  State  were,  by 
their  agent,  bribed  and  coerced  into  the  passage  of  the  law.  It 
was  of  their  seeking.  Let  it  not  be  forgotten  that  the  act  of  set- 
tlement "was  procured  by  the  joint  efforts  of  the  friends  of  the 
State  University  and  others  who  contributed  as  much  as  defend- 
ant  to  its  passage,"  and  that  the  defendant  to  whom  they  refer 
was  their  agent  mid  counsel. 

It.  is  also  urged  that  tlie  lands  sold  by  the  Stale  prior  to  De- 
cember 3,  1847,  were  of  great  value,  and  that  the  proceeds  of  such 


352 

sales,  together  with  interest  thereon,  was  not  sufficient  compensa- 
tion to  the  University  for  such  lands;  that  the  University,  be- 
cause of  the  action  of  the  State,  was  deprived  of  the  use  and 
rental  of  such  lands  for  a  term  of  years.  This  statement  is  also 
fallacious.  The  truth  is  that  these  lands  were  of  little  value ;  that 
they  were  sold  by  the  State  for  what  they  were  reasonably  worth, 
and  for  aught  that  appears  for  as  much  as  the  University  received 
for  the  4,000  acres  sold  by  it.  The  act  authorizing  the  sale  of  the 
lands  was  passed  in  1822.  The  finding  of  the  Marion  Circuit  Court 
shows  that  the  State  received  for  them  $43,348.15,  an  average  of 
$2.57  per  acre.  Between  the  date  of  the  organization  of  the  board 
in  1807  and  1820,  the  trustees  of  the  University  memorialized  Con- 
gress on  at  least  three  several  occasions  to  be  permitted  to  sell  said 
lands.  From  one  of  these  petitions  (that  of  November  15,  1817), 
I  submit  the  following : 

"Your  petitioners  would  further  respectfully  represent  that  with  a  view 
of  obtaining  an  active  fund  for  the  benefit  of  the  institution  the  board  of 
trustees,  conformably  to  the  provisions  of  the  act  of  incorporation,  offered  to 
lease,  in  quarter  sections,  the  remaining  part  of  the  township.  The  country, 
however,  must  be  settled  and  improvements  considerably  advanced  before  any 
reliance  can  be  placed  upon  a  fund  derived  from  that  source.  Those  possessing 
the  means  will  purchase.  Those  confiding  in  the  indulgence  of  the  govern- 
ment will  spread  themselves  along  the  frontiers  on  the  public  lands^  and 
thousands  now  prefer  the  latter  to  a  lease  on  liberal  terms  of  the  land  appro- 
priated for  the  use  of  the  University.  Few  leases  being  taken,  and  believing 
the  arrangement  likely  to  prove  unproductive,  at  least  for  many  years,  the 
board  have,  for  the  present,  abandoned  the  measure." 

From  another  petition,  dated  January  12,  1818,  I  submit  the 
following : 

"The  trustees  are  also  authorized  to  rent  out  or  lease  the  remaining  part 
of  the  township  for  the  use  of  the  said  University.  It  appears,  however,  that 
from  causes  incidental  to  a  new  country,  where  the  price  of  land  is  low  and 
the  quantity  for  settlement  disproportionate  to  the  population,  that  the  trus- 
tees have  not  been  able  to  make  any  advantageous  disposition  of  the  lands 
by  granting  leases,  nor  to  derive  effective  resources  from  rents  for  the  sup- 
port of  the  seminary,  and  that  the  unfavorable  prospect  of  their  unproductive- 
ness for  years  to  come  when  disposed  of  in  that  way  has  induced  the  trustees 
for  the  present  to  abandon  the  measure." 

From  yet  another  petition,  dated  December  17,  1818,  I  submit 
the  f ollowing  evidence  touching  the  rental  value  of  these  lands : 

"It  is  also  observable  that  this  township  of  land  is  situated  in  the  vicinity 
of  the  village  of  Princeton,  and  that  on  two  of  the  quarter  sections  within  it 
sawmills  have  been  erected  with  no  other  means  of  supply  but  from  the  timber 
of  the  seminary  lands,  and  that  daily  depredations  are  committed  upon  the 


353 

most  valuable  of  this  timber.  Your  memorialists  need  hardly  suggest  the  idea 
that  this  circumstance  will  not  only  prevent  an  increase  of  the  value  of  these 
lands,  but  must  gradually  diminish  its  value,  a  circumstance  which  the  utmost 
vigilance  of  your  memorialists  will  not  be  able  to  prevent." 

The  legislation  now  presented  purports  to  be  based,  in  part  at 
least,  upon  a  finding  made  by  the  Secretary,  Auditor  and  Treasurer 
of  State,  as  members  of  a  commission  appointed  by  the  General 
Assembly  of  1903  to  make  investigation  of  said  claim.  Such  find- 
ing is  set  out  in  one  of  the  whereases  in  the  preamble  to  the  bill. 
It  is  as  follows : 

"After  a  full  consideration  of  this  case,  and  in  view  of  all  the  facts,  we 
are  convinced  that  this  University  has  sustained  losses  and  damages  beyond 
any  reparation  that  has  been  made  by  the  State.  We  therefore  recommend 
that  the  sum  of  $120,548  be  appropriated  to  Vincennes  University  as  a  just 
and  equitable  settlement  of  this  matter." 

The  report  filed  by  the  majority  of  said  commission  absolutely 
and  wholly  fails  to  set  forth  any  tangible  or  specific  basis  for  this 
finding. 

Governor  Durbin  was  a  member  of  this  commission.  He  par- 
ticipated in  its  deliberations.  He  was  familiar  with  the  arguments 
presented  to  the  commission  and  with  the  discussion  between  its 
members.  He  could  not  concur  in  the  finding  of  the  majority  of 
the  commission,  and  filed  a  minority  report  February  13,  1905. 
From  his  report  it  becomes  apparent  that  the  report  of  the  ma j  ority 
of  the  commission,  though  not  disclosing  that  fact,  is  based  in  part 
upon  the  fact  that  Mr.  Judah,  counsel  for  the  University,  retained 
as  his  fee  $25,000  of  the  proceeds  of  the  bonds  issued  to  the  Uni- 
versity in  settlement  of  the  judgment  of  the  Marion  Circuit  Court. 

The  present  Executive  has  personal  knowledge,  from  conver- 
sations held  with  at  least  two  members  of  the  commission  who  signed 
the  majority  report,  immediately  after  the  filing  of  the  same  in 
January,  1905,  that  their  report  is  based  in  part  upon  this  at- 
torney's fee.  They  so  stated  and  sought  to  justify  their  finding  in 
part  upon  that  ground. 

It  may  be  true  that  Mr.  Judah  charged  the  University  and  re- 
ceived from  it  $25,000  for  his  services  as  its  counsel  in  the  liti- 
gation with  the  State  concerning  these  lands.  It  may  be  that  the 
fee  charged  was  exorbitant.  But  with  that  we  have  nothing  to  do. 
The  State  is  not  bound,  either  in  law  or  in  equity,  to  pay  the  coun- 
sel fees  of  the  University.  The  question  of  law  involved  in  the 
issue  between  the  University  and  the  State,  as  hereinbefore  sug- 
gested, was  so  close  as  to  cause  able  jurists,  to  disagree  concerning 
[23—19891] 


354 

it.  The  State  acted  in  good  faith.  It  thought  it  was  defending  its 
own.  And  in  such  a  case  it  is  under  no  legal  or  moral  obligation 
to  pay  the  counsel  fees  of  its  adversary.  This  is  especially  true 
if,  as  stated  by  the  trustees  in  their  suit  against  Mr.  Judah,  he 
had  used  a  portion  of  the  funds  so  retained  by  him  to  corrupt  the 
General  Assembly  of  the  State  to  secure  the  passage  of  the  act  of 
settlement. 

There  is  yet  another  reason  why  so  much  of  the  claim  as  is 
based  upon  the  sale  of  lands  made  prior  to  December  3,  1847, 
should  not  now  be  considered.  The  law  under  which  the  settle- 
ment was  made  especially  provided  that  "the  receipt  of  the  said 
bonds  by  the  said,  the  board  of  trustees  for  the  Vincennes  Uni- 
versity, shall  be  deemed  and  taken  to  be  a  release,  in  law  and  fact, 
by  the  said  board,  to  the  State  and  to  all  persons  whatever  of  said 
decree  and  of  all  right  and  claim  on  the  part  of  said  board  to  or 
on  account  of  the  lands  in  said  Gibson,  Seminary  township,  sold 
by  the  State,  and  to  all  money  being  the  proceeds  thereof  or  in- 
terest thereon,  and  to  all  costs  and  damages  therefor,  as  fully  as  a 
release,  under  their  corporate  seal,  could  in  any  manner  operate." 

This  law,  as  we  have  seen,  was  in  fact  the  University's  own  cre- 
ation. It  accepted  the  terms  of  settlement  there  provided,  and  re- 
ceived the  $66,585  worth  of  bonds  in  final  and  complete  settlement. 
On  the  day  it  did  that  it  finally  and  forever  estopped  itself  from 
further  claim  against  the  State  on  account  of  the  sale  of  all  lands 
prior  to  December  3,  1847. 

On  the  3d  day  of  December,  1847,  there  remained  unsold  of 
the  lands  granted  to  the  University  2,200  acres,  the  University 
itself  having  sold  4,000  acres  and  the  State  16,840  acres. 

There  appears  to  have  been  no  effort  on  the  part  of  the  board 
of  trustees  to  reopen  this  settlement  for  a  period  of  forty  years. 
The  matter  was  presented  to  the  General  Assembly  of  1895,  and 
an  appropriation  of  $15,000  was  made  as  an  item  in  the  general 
appropriation  bill,  "in  full  settlement  of  all  claims  against  the 
State."  This  money  was  paid  to  and  received  by  Joseph  L.  Bay- 
ard, treasurer  of  the  board  of  trustees  of  the  University,  under  au- 
thority of  the  following  resolution  adopted  by  the  board,  April  1, 
1895: 

'Resolved,  That  Joseph  L.  liayard,  treasurer  of  the  board  of  trustees  of 
Vincennes  University,  Vineennes,  Fnd.,  be  and  is  hereby  'authorized  and 
Urected  to  m-dve  and  receipt  for  the  .$15,000  appropriated  to  the  said  board 
by  the  Legislature  of  Indiana  at  its  last  session,  1895,  and  for  any  and  all 
warrants  issued  therefor,  and  that  he  notify  the  secretary  and  report  to 
this  board  as  soon  as  such  payment  is  made." 


355 

The  above  resolution  followed  a  report  of  a  committee  ap- 
pointed by  the  board  of  trustees,  in  which  the  trustees  were  ad- 
vised "that  the  acceptance  by  the  University  of  the  amount  so  ap- 
propriated can  not  prevent  the  University  from  presenting  the  bal- 
ance of  the  claim  for  payment  to  a  future  Legislature,  nor  pro- 
hibit such  Legislature  from  allowing  and  paying  such  further  sum 
as  may  be  justly  owning  to  the  University  for  the  reason  that  the 
Legislature  at  one  session  can  not  bind  nor  control  the  action  of  a 
future  session  in  matters  of  this  kind." 

October  31,  1895,  Mr.  Bayard  receipted  the  State  "in  full  set- 
tlement of  all  claims  of  Vincennes  University  against  the  State  of 
Indiana." 

After  having  accepted  this  appropriation  made  by  the  General 
Assembly  upon  the  condition  that  it  should  be  received  by  the 
board  of  trustees  as  full  settlement  of  the  claim,  an  effort  was  im- 
mediately set  on  foot  to  secure  an  additional  appropriation,  and 
in  1899  a  bill  providing  for  the  issuance  of  $120,000  of  bonds  of 
the  State  to  be  turned  over  to  the  University,  passed  the  General 
Assembly  and  was  vetoed  by  Governor  Mount,  from  whose  mes- 
sage I  submit  the  following: 

"It  will  be  seen  that  the  State  of  Indiana,  by  act  of  the  Legislature,  paid 
in  good  faith  all  the  money  derived  from  the  sale  of  these  lands  to  a  uni- 
versity of  learning,  and  that  in  addition  they  paid  Vincennes  University  the 
amount  of  the  judgment  aforesaid,  which  was,  as  shown  by  the  act  of  the 
Legislature  and  by  the  receipts,  to  have  been,  and  was  understood  to  have 
been,  a  full  settlement  of  all  claims  against  the  State. 

"From  this  transaction  it  would  appear  that  there  remains  no  claim  in 
equity  or  in  law  against  the  State  of  Indiana  by  reason  of  the  sale  of  the 
aforesaid  16,845.95  acres.  If  there  remains  a  claim  against  the  State  of 
Indiana  it  must  be  for  1,584.75  acres,  as  set  out  in  the  report  of  the  Auditor 
of  State,  the  value  of  which  the  commissioner  placed  at  from  25  cents  to  50 
cents  per  acre. 

"I  have  been  unable  to  find  what  became  of  that  land,  for  what  it  was 
sold,  or  what  disposition  was  made  of  the  money.  For  this  1,584.75  acres  it 
would  seem  that  the  University  has  a  claim,  and  how  far  the  $15,000  voted  by 
the  General  Assembly  four  years  ago  goes  toward  settling  that  claim,  or 
whether  it  oversettles  the  claim,  is  a  matter  I  do  not  know.  Four  years  ago, 
when  this  money  was  appropriated,  it  was  expressly  stipulated  in  the  appro- 
priation that  the  payment  of  the  $15,000  was  to  be  a  settlement  in  full  of 
all  claims  against  the  State  of  Indiana  growing  out  of  the  sale  of  the  lands 
belonging  to  the  University,  and  the  receipt  so  stipulated.  For  the  foregoing 
reasons  I  cannot  approve  this  bill." 

In  1901  a  similar  bill  to  that  vetoed  by  Governor  Mount  in 
1 899  was  introduced  in  the  Senate,  passed  that  body,  went  to  the 
House,  but  was  defeated  iii  the  House.  In  1903  a  similar  bill  was 


356 

introduced,  but  not  passed,  A  concurrent  resolution,  however,  ap- 
pointed the  Governor,  Secretary,  Auditor  and  Treasurer  of  State 
as  a  commission  to  investigate  the  claim  and  report  to  the  Sixty- 
fourth  General  Assembly.  That  report  I  have  heretofore  adverted 
to.  The  Secretary,  Auditor  and  Treasurer  of  State  joined  in  a 
majority  report,  recommending  the  appropriation  carried  in  the 
present  bill.  The  finding  of  the  majority  of  the  commission  does 
not  disclose  the  basis  upon  which  it  is  made,  but  the  minority  re- 
port filed  by  Governor  Durbin  discloses  that  one  of  the  substantial 
elements  entering  into  it  was  the  2,200  acres  of  land  unsold  at  the 
time  of  the  beginning  of  the  suit  against  the  State  in  the  Marion 
Circuit  Court  in  1847. 

As  heretofore  shown,  another  element  entering  into  such  finding 
was  the  counsel  fee  paid  by  the  University  to  its  attorney,  Mr. 
Judah.  These  are  the  only  two  items  which  give  even  a  semblance 
of  foundation  for  the  finding  of  the  majority  of  said  commission. 

Governor  Durbin,  in  the  course  of  a  separate  report,  speaking 
of  so  much  of  the  claim  as  is  based  upon  the  2,200  acres  of  land  in 
question,  said: 

"I  at  one  time  during  the  consideration,  felt  the  State  should  account. for 
the  2,200  acres,  and  agreed  with  my  associates  therein,  but  further  light  be- 
ing shed  upon  the  matter,  I  am  convinced  the  State  should  not  be  held  to 
account  for  the  neglect  to  look  after  and  protect  their  own  interests  and 
property.  A  century  has  passed  since  the  land  was  set  apart  by  the  Gov- 
ernment and  a  half  century  since  the  settlement  made  upon  the  findings  of  the 
court.  Naturally  the  question  arises,  and  quickly  so,  why  has  the  University 
permitted  so  much  time  to  elapse  without  seeking  to  be  reimbursed?  Why 
did  not  the  University  take  possession  of  the  2,200  acres?  If  it  had  been 
sold  and  not  accounted  for  at  the  time  of  the  settlement  in  1855,  why  did  the 
University  not  at  that  time  ask  for  the  proceeds  turned  over?  If  sold  by 
the  State  at  any  time  since  1855,  why  did  not  the  University  interpose  an  ob- 
jection and  stop  the  sales  or  ask  for  an  accounting?  It  stands  out  con- 
spicuously that  the  University  has  not  used  due  diligence  in  looking  after 
her  own  property  and  protecting  her  rights,  and  in  this  she  should  not  ask  the 
State  to  make  good  to  her  for  any  loss  sustained.  The  representatives  of  the 
University  have  not  traced  the  2,200  acres  to  see  what  disposition  has  been 
made  thereof,  and  displayed  no  disposition  to  assist  the  commission  in  fer- 
reting out  who  sold  them  or  if  they  were  ever  sold.  *  *  *  I  sincerely 
wish  I  could  take  a  stand  for  the  claim  and  maintain  it  with  suitable  argu- 
ment and  facts,  but  I  cannot." 

It  is  due  to  Governor  Durbin  and  to  the  then  Secretary,  Aud- 
itor and  Treasurer  of  State  to  say  that  at  the  time  of  the  filing  of 
their  report  no  definite  information  had  been  obtained  as  to  what 
disposition  had  been  made  of  the  2,200  acres  of  land  in  question. 


357 

Fortunately,  we  are  now  in  possession  of  definite  information.  I 
am  advised  by  the  present  Auditor  of  State,  under  date  of  Febru- 
ary 18,  1907,  that  the  State  sold  2,141.75  acres  of  said  lands  be- 
tween the  13th  day  of  January,  1848,  and  the  9th  day  of  Novem- 
ber, 1864,  and  that  it  received  therefor  the  sum  of  $1,547.30.  This 
leaves  but  58.25  acres  of  the  entire  congressional  grant  unac- 
counted for,  and  which  in  all  probability  have  never  been  sold.  The 
2,200  acres  remaining  unsold  in  1847  are  situated  in  the  bottoms 
of  the  Wabash  and  Patoka  rivers,  and  it  is  entirely  probable  that 
in  so  large  a  tract  so  located,  a  shortage  of  58.25  acres  exists.  I 
do  not  believe  the  University  ever  had  either  a  legal  or  an  equitable 
claim  against  the  State  for  anything  more  than  the  State  received 
for  these  lands  $1,547.30,  with  interest  thereon.  Interest  on  this 
sum  at  6  per  cent,  for  fifty-two  years  amounts  to  $4,827.57,  and 
the  principal  and  interest  aggregate  $6,374.87. 

We  have  already  seen  that  in  1895  the  University  was  paid 
$15,000.  Interest  on  this  sum  at  6  per  cent,  for  twelve  years  is 
$10,800.  Principal  and  interest  aggregate  $25,800.  This  sum 
less  the  principal  and  interest  of  the  money  received  from  the  sale 
of  the  2,141.75  acres  of  land— $6,374.87 — discloses  that  the  State 
has  paid  the  University  for  these  lands,  $18,425.32  more  than  was 
due  it. 

If  it  is  contended  that  to  the  $1,547.30  received  by  the  State 
from  the  sale  of  the  2,141.75  acres  of  land  should  be  added  com- 
pound interest,  the  University  is  still  overpaid.  Compound  interest 
at  6  per  cent,  for  fifty-two  years  on  $1,547.30  is  $30,444.46.  The 
principal  and  interest  aggregate  $31,991.76.  Compound  interest 
for  twelve  years  at  6  per  cent,  on  the  $15,00,0  paid  the  University 
in  1895  is  $20,785.14.  Principal  and  interest  aggregate  $35,- 
785.14.  The  difference  between  this  sum  and  the  proceeds  received 
by  the  State  for  the  lands  in  question  compounded  at  6  per  cent, 
interest  for  fifty-two  years  is  $3,792.38,  and  represents  the  amount 
the  University  has  received  in  excess  of  what  was  due  it. 

It  has  been  said  that  these  lands  were  worth  more  than  the 
State  received  for  them.  I  have  already  adverted  to  this  question, 
and  have  shown  by  evidence  taken  from  petitions  and  memorials 
addressed  to  the  Congress  of  the  United  States  by  the  trustees  of 
the  University  themselves  that  this  is  not  true,  and  in  addition  to 
what  I  have  hereinbefore  said  upon  this  subject,  I  submit  that  it  is 
entirely  probable  that  the  2,200  acres  of  land  remaining  unsold  in 
1847  from  the  23,040  acres  granted  by  Congress,  was  the  least 
desirable  of  all  the  lands  in  the  grant.  With  Government  land  on 


every  side  purchasable  at  mere  nominal  prices,  it  is  reasonably  cer- 
tain that  the  lands  within  this  grant  first  sold  were  best  in  quality 
and  Hint  Hie  poorest  remained.  The  location  of  the  2,200  acres 
supports  this  view.  They  li<'  in  Hie  northwest  corner  of  the  town- 
ship, in  the  Wabash  and  Patoka  river  bottoms.  They,  were  badly 
timbered  and  inundated,  and  the  commmissioner  reports  their  value 
at  from  25  cents  to  50  cents  per  acre.  The  State  received  an  av- 
erage of  about  70  cents  per  acre. 

I  am  advised  through  what  I  believe  to  be  reliable  sources  that 
at  the  time  the  lands  were  sold  they  were  marshy  and  wet  the  year 
around,  a  tangle  of  vines  and  timber,  and  that  it  was  well  worth 
them  to  reclaim  them.  I  am  also  advised  that  two  of  the  men  who 
purchased  a  part  of  them  after  paying  taxes  on  their  purchase  for 
years  sold  it  for  less  than  it  cost  them.  These  facts  taken  together 
make  it  morally  certain  that  the  State  has  paid  and  overpaid  the 
University ;  that  there  remains  no  legal  obligation.  It  is  equally 
clear  that  there  is  no  equitable  or  moral  obligation  that  has  not  al- 
ready been  generously  met  and  satisfied. 

It,  therefore,  follows  that  the  issuing  of  the  $120,548  of  bonds 
and  their  delivery  to  the  trustees  of  the  University  provided  for 
by  the  pending  measure  is  a  gift  to  the  University  outright  and 
without  consideration.  As  I  shall  hereafter  show,  the  General 
Assembly  has  no  authority  under  the  Constitution  to  give  away 
public  moneys  raised  by  tax  levies  upon  the  property  of  the  people 
of  the  State  either  to  individuals  or  to  private  corporations,  how- 
ever meritorious  their  purpose  and  however  deserving  they  may  be. 

It  is  important  in  this  connection  to  remember  that  this  bill 
does  not  carry  an  appropriation  of  money.  It  provides  for  the 
creation  of  a  bonded  indebtedness  against  the  State,  through  the 
issuing  of  its  bonds,  which  are  to  be  given  away.  This  is  clearly 
in  contravention  of  Section  5  of  Article  10,  of  the  Constitution  of 
the  State,  which  provides: 

"No  law  shall  authorize  any  debt  to  be  contracted  on  behalf  of  the  State, 
except  in  the  following  cases:  To  meet  casual  deficits  of  the  revenue;  to  pay 
the  interest  on  the  State  debt;  to  repel  invasion,  suppress  insurrection,  or,  if 
hostilities  be  threatened,  provide  for  the  public  defense." 

Can  it  be  said  that  the  bonds  provided  for  and  the  debt  created 
by  this  bill  are  to  meet  casual  deficits  in  the  revenue?  Can  it  be 
said  that  they  are  to  pay  the  interest  on  the  State  debt?  Can  it 
be  said  they  are  to  repel  invasion,  to  suppress  insurrection  or  to 
provide  for  the  public  defense?  If  not,  the  legislation  is  invalid. 


359 

It  is  not  enough  to  say  that  the  bonds  are  issued  to  liquidate  a  debt 
created  by  the  measure  which  authorizes  them.  That  could  be  said 
in  any  case. 

The  word  "debt"  as  used  in  this  section  of  the  Constitution 
means  a  debt  within  legal  contemplation,  a  valid  existing  obliga- 
tion to  pay,  which  is  enforceable  in  law ;  something  due  from  the 
State  which  it  is  bound  to  pay.  Even  the  friends  of  the  University 
admit  that  this  claim  is  not  a  legal  obligation ;  that  it  is  not  such 
a  debt  as  could  be  enforced  in  the  courts.  The  most  they  have  been 
able  to  say  in  its  behalf  is  that  it  is  a  "sentimental  or  moral  obliga- 
tion." To  my  mind  it  is  clear  that  it  is  not  even  that ;  but  if  it 
were,  it  would  not  be  a  sufficient  claim  upon  which  to  predicate  the 
issuing  of  bonds  under  the  above  provision  of  the  Constitution. 

That  the  General  Assembly  has  no  constitutional  power  to 
make  an  appropriation  of  public  funds  raised  by  taxation  for  a 
private  purpose  is  agreed  by  all  authorities.  In  its  last  analysis 
this  bill  is  an  attempt  to  make  an  appropriation  of  public  funds 
for  a  private  purpose,  and  in  effect  to  take  the  property  of  one 
citizen  and  bestow  it  upon  a  private  corporation  through  the  ap- 
propriation of  public  funds  which  are  to  be  raised  by  taxation. 
Such  an  attempt  is  unconstitutional,  and  therefore  invalid. 

McClelland,  etc.,  v.  The  State,  138  Ind.  321 ; 
State,  etc.,  v.  Tappan,  29  Wis.  664; 
People  v.  Supervisor,  etc.,  16  Mich.  253 ; 
Bristol  v.  Johnson,  34  Mich.  123; 
Hoagland  v.  City  of  Sacramento,  52  Cal.  142 ; 
Lowell  v.  City  of  Boston,  111  Mass.  454; 
Thorndyke  v.  Inhabitants  of  Camden,  82  Me.  39 ; 
Cooley  on  Constitutional  Limitations,  pp.  332-341. 

The  passage  of  this  law  will  be  of  no  benefit  to  the  University. 
Its  provisions  are  invalid.  It  can  only  involve  the  University  in 
losing  litigation.  Believing  that  the  University  has  estopped  itself 
by  the  two  several  settlements  of  its  claim  against  the  State  from 
asking  for  further  contribution  fcom  the  State;  that  its  claim 
has  been  already  more  than  paid,  and  that  the  present  attempt  to 
compensate  it  further  is  an  unconstitutional  exercise  of  legislative 
authority,  I  am  compelled  to  refuse  executive  approval. 

J.  FRANK  HANT.Y, 

Governor. 


360 
HOUSE  BILL  No.  237. 

MARCH  8,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith,  without  executive  approval,  House  Bill  No. 
237,  relating  to  the  establishment  of  flag  stations  on  the  line  of 
steam  railroads  within  the  limits  of  towns  or  cities  of  more  than 
2,500  and  less  than  2,800  inhabitants  and  of  more  than  1,750  and 
less  than  1,850  inhabitants. 

The  classification  sought  to  be  made  is  unreasonable  and  arbi- 
trary. The  act  covers  one  of  the  subjects  inhibited  by  Section  22, 
Article  4,  of  the  Constitution. 

.  The  only  basis  for  the  classification  is  the  difference  in  popula- 
tion of  the  towns  sought  to  be  classified.  This  difference  is  300  in 
the  first  classification  named  and  100  in  the  second. 

The  Supreme  Court  of  the  State  has  held  that  cities  and  towns 
may  be  classified,  under  the  Constitution,  upon  the  basis  of  differ- 
ence in  population  and  that  such  laws  applicable  to  a  single  class 
may  be  regarded  as  general  in  their  character  and  not  local  or 
special.  But  they  have  recently  held  that  such  classification  must 
be  natural  and  reasonable  and  not  arbitrary  ;  that  it  must  be  found- 
ed upon  real  and  substantial  differences  in  the  local  situation  and 
necessities  of  the  classes  of  cities  and  towns  to  which  it  applies. 

In  a  recent  case  it  is  said: 

"Where  such  a  classification  excludes  from  its  operations  cities  and  towns 
differing  in  no  material  particular  from  those  included  in  a  class,  the  statute 
cannot  be  upheld." 

School  City  of  Rushville  v.  Hayes,  162  Ind.  at  200. 

The  difference  in  population  in  the  case  cited  was  but  5,  but 
the  principle  involved  is  the  same  as  that  presented  in  the  bill  re- 
turned herewith. 

In  a  more  recent  case,  where  the  basis  of  classification  was  a 
difference  in  population  of  a  thousand,  the  reason  for  the  rule  is 
declared  with  clearness  and  force: 

"Plainly,  a  law  may  be  general  in  its  provisions,  and  may  apply  to  the 
whole  of  a  group  of  objects  having  characteristics  sufficiently  marked  and 
important  to  make  them  a  class  by  themselves,  and  yet  such  law  may  be  in 
contravention  of  this  constitutional  prohibition.  Thus,  a  law  enacting  that  in 
every  city  in  the  State  in  which  there  are  ten  churches  there  should  be  three 
commissioners  of  the  water  department  with  certain  prescribed  duties,  would 
present  a  specimen  of  such  a  law,  for  it  would  sufficiently  designate  a  class 


361 

of  cities,  and  would  embrace  the  whole  of  such  class,  and  yet  it  does  not  seem 
to  me  that  it  could  be  sustained  by  the  courts.  If  it  could  be  so  sanctioned, 
then  the  constitutional  restriction  would  be  of  no  avail,  as  there  are  few 
objects  that  cannot  be  arbitrarily  associated,  if  all  that  is  requisite  for  the 
purpose  of  legislation  is  to  designate  them  by  some  quality,  no  matter  what 
that  may  be,  which  will  so  distinguish  them  as  to  mark  them  as  a  distinct  class. 
But  the  true  principle  requires  something  more  than  a  mere  designation  by 
such  characteristics  as  will  serve  to  classify,  for  the  characteristics  which  thus 
serve  as  the  basis  of  classification  must  be  of  such  a  nature  as  to  mark  the 
objects  so  designated  as  peculiarly  requiring  exclusive  legislation.  There  must 
be  substantial  distinction,  having  a  reference  to  the  subject-matter  of  the  pro- 
posed legislation,  between  the  objects  or  places  embraced  in  such  legislation, 
and  the  objects  or  places  excluded.  The  marks  of  distinction  on  which  the 
classification  is  founded  must  be  such,  in  the  nature  of  things,  as  will,  in  some 
reasonable  degree,  at  least,  account  for  or  justify  the  restriction  of  the  legisla- 
tion. Principles  of  this  sort  can  be  best  elucidated  by  examples.  I  have 
already  given  a  sample  of  a  mere  arbitrary  classification,  founded  on  no 
casual  relation  between  the  subject-matter  of  such  legislation  and  the  things 
so  classified.  A  sample  of  the  other,  or  legitimate  kind,  would  be  signified 
in  a  law  that  'should  give  to  all  cities  in  the  State  situated  on  tide  water  the 
privilege  of  using  such  waters  in  connection  with  their  sewers.  In  such  an 
enactment  but  a  part  of  the  cities  of  the  State  would  be  embraced,  but 
the  classification  would  be  lawful  and  proper,  inasmuch  as  the  places  em- 
braced would  be  possessed  of  a  characteristic  distinct  from  those  possessed  by 
the  excluded  places,  such  characteristic  being  of  such  a  nature  as  to  afford  a 
reasonable  ground  for  such  special  legislation.  In  the  two  classes  of  instances 
thus  exemplified,  the  basis  of  the  classification  of  the  one  would  be  by  refer- 
ence to  marks  of  distinction  having  no  connection  with  the  substance  of  the 
supposed  statute;  in  the  other  the  opposite  of  this  would  obtain — so  that,  in 
the  former,  the  classification  would  be  formal  and  arbitrary;  in  the  latter, 
substantial  and  springing  out  of  the  nature  of  the  subject  of  this  legislation. 
"Applying  these  tests,  it  is  evident  that  the  classification  in  said  act  is 
merely  arbitrary,  and  cannot  relieve  the  same  from  the  infirmity  of  being 
special  and  local.  There  is  no  reason  inhering  in  the  subject-matter  of  the  act 
for  giving  the  power  mentioned  therein  to  cities  of  a  population  of  between 
6,000  and  7,000  according  to  the  last  preceding  United  States  census,  and  not 
giving  the  same  to  the  other  cities  in  the  State." 

These  decisions  are  so  decisive  of  the  question  here  presented  as 
to  preclude  my  approval  of  this  measure. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


362 
HOUSE  BILL  No.  286. 

MARCH  11,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives  : 

I  return  herewith  House  Bill  No.  286  without  executive  ap- 
proval. 

It  provides  that  highways  on  township,  county  and  road  dis- 
trict lines  shall  be  apportioned  between  the  trustees  of  townships 
or  road  districts  separated  by  such  lines,  by  giving  to  each  of 
such  trustees  an  equal  one-half  of  such  line  of  road.  It  then  pro- 
vides "that  all  persons  living  on  or  near  such  township,  county  or 
road  district  lines  may  be  permitted  to  work  their  land  and  poll 
tax  on  such  division  line  roads  fronting  their  lands  or  as  near  their 
lands  as  practicable  under  the  direction  of  the  trustee  in  whose 
township  such  persons  reside,  and  such  trustee  shall  have  jurisdic- 
tion over  such  division  line  roads  whether  the  same  be  in  his  divi- 
sion or  not,  to  the  extent  of  working  such  taxes." 

This,  provision  impairs  the  division  of  such  highways  made  in 
the  first  part  of  the  proposed  bill  and  divides  the  jurisdiction  over 
the  highways  so  apportioned  between  trustees  of  the  two  townships, 
and  will  lead  to  conflict  of  authority  and  much  confusion.  There 
is  no  especial  necessity  for  legislation  upon  this  subject,  as  the  law 
already  provides  for  a  division  of  such  highways  between  the  trus- 
tees of  the  townships  through  which  the  same  run,  giving  to  each 
exclusive  jurisdiction  over  the  portion  assigned  to  him. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  473. 


MARCH  11,  1907. 

Hon.  Fred  A.  Sims,  Secretary  of  State,  Indianapolis,  Indiana: 

Sir — I  file  herewith  House  Bill  No.  473,  without  executive  ap- 
proval, together  with  my  objections  thereto,  the  House  of  Repre- 
sentatives having  adjourned  at  the  hour  of  5:15  p.  m.,  March  11, 
1907,  before  the  expiration  of  the  three  days  allowed  by  the  Con- 
stitution for  executive  consideration  thereof. 

Respectfully, 

J.  FRANK  HANLY, 

Governor. 


Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith,  without  executive  approval,  House  Bill  No. 
473. 

The  bill  provides  that  "options  and  leases  held  by  persons  who 
are  non-residents  of  the  State,  or  by  foreign  corporations,  or  by 
persons  for  the  use  of  such  non-residents  or  foreign  corporations, 
on  real  estate  in  this  State,"  shall  "be  recorded  in  the  recorder's 
office  of  the  county  in  which  such  land  is  situate  within  thirty 
days  from  the  time  of  the  execution  thereof,  and  all  such  options 
and  leases  that  shall  not  be  recorded  writhin  such  time  shall  be  void 
for  any  purpose  whatever."  Township  assessors  are  authorized 
to  list  and  appraise,  for  purposes  of  taxation,  "all  leases  and  op- 
tions on  real  estate  held  by  persons  who  are  non-residents  of  said 
State,  and  leases  and  options  held  by  foreign  corporations,  or 
for  the  use  of  such  persons  and  corporations." 

The  leases  and  options  referred  to  relate  to  leases  and  options 
of  real  estate  taken  "for  the  purpose  of  prospecting  for,  and  the 
development  and  working  of  wells  for  gas,  oil,  mineral  water,  or 
minerals  of  whatever  nature." 

The  bill  contravenes  Section  2  of  Article  IV  of  the  Constitution 
of  the  United  States,  which  provides  that  "The  citizens  of  each 
State  shall  be  entitled  to  all  privileges  and  immunities  of  citizens 
in  the  several  States."  It  also  contravenes  the  Fourteenth  Amend- 
ment to  the  Federal  Constitution  that  "No  State  shall  make  or  en- 
force any  law  which  shall  abridge  the  privileges  or  immunities  of 
a  citizen  of  the  United  States ;  nor  shall  any  State  deprive  any 
person  of  life,  liberty  or  property  without  due  process  of  law ; 
nor  deny  to  any  person  within  its  jurisdiction  the  equal  protec- 
tion of  the  laws." 

Under  existing  law  in  this  State  a  resident  owner  of  any  in- 
strument vesting  in  him  any  interest  in  real  estate,  is  given  forty- 
five  days  in  which  to  file  such  instrument  in  the  office  of  the  recorder 
of  the  county  where  the  land  lies.  If  such  instrument  is  never 
recorded,  it  remains  a  valid  contract  as  between  the  grantor  and 
grantee,  and  is  only  void  as  between  the  grantee  and  third  parties 
acquiring  interest  in  the  land  subsequent  to  its  conveyance  and  the 
time  limit  for  recording  without  notice. 

The  present  bill  requires  non-residents  to  record  such  instru- 
ments within  thirty  days  from  the  date  thereof  and  declares  all 
such  as  are  not  thus  recorded  to  be  void  "for  any  purpose  what- 
ever." 

This  is  clearly  a  discrimination  in  favor  of  resident  citizens  as 


364 

against  the  citizens  of  other  States.  This  is  equally  true  of  those 
provisions  of  the  bill  which  require  the  leases  and  options  in  ques- 
tion to  be  listed  for  taxation. 

I  am  in  accord  with  the  evident  purpose  of  the  author  of  the 
bill  to  reach  and  tax  the  interests  accruing  to  all  persons,  resident 
or  non-resident,  in  real  estate  in  Indiana,  because  of  any  such  con- 
tracts. It  can  only  be  effectively  reached,  however,  by  a  provi- 
sion of  law  which  shall  require  the  taxation  of  such  interest  in  real 
estate  as  is  created  by  the  instrument  or  instruments  in  question. 

An  ordinance  of  the  city  of  Indianapolis  licensing  breweries, 
distilleries  and  their  depots  and  agencies  established  in  the  city, 
with  other  wholesale  dealers  in  malt  liquors,  but  excepting  from 
its  operation  residents  of  the  city  doing  a  wholesale  business  in  bot- 
tled beer,  was  held  void  for  discrimination  by  the  Supreme  Court 
of  this  State. 

City  of  Indianapolis  v.  Bieler,  138  Ind.  30. 

An  act  of  the  General  Assembly  providing  that  "It  shall  be  un- 
lawful for  any  person,  association  or  corporation  to  nominate  or 
appoint  any  person  a  trustee  in  any  deed,  mortgage,  or  other  in- 
strument in  writing  (except  wills)  for  any  purpose  whatever,  who 
shall  not  be,  at  the  time,  a  bona  fide  resident  of  the  State  of  In- 
diana ;  and  it  shall  be  unlawful  for  any  person  who  is  not  a  bona 
fide  resident  of  the  State,  to  act  as  such  trustee,"  was  held  invalid, 
the  court  saying: 

"Reluctant  as  we  are  to  hold  a  statute  regularly  enacted  by  the  General 
Assembly  unconstitutional,  we  cannot  avoid  the  conclusion  that  the  act  under 
consideration  is  in  conflict  with  those  provisions  of  the  Constitution  of  the 
United  States  which  guarantee  to  the  citizens  of  each  State,  and  of  the 
United  States,  all  the  privileges  and  immunities  of  the  citizens  of  the  several 
States." 

Roby  v.  Smith,  131  Ind.  at  347. 

The  Supreme  Court  of  the  United  States  held  invalid  a  statute 
of  the  State  of  Maryland,  prohibiting  persons,  not  permanent  resi- 
dents in  that  State,  from  selling,  offering  for  sale  or  exposing  for 
sale  within  a  certain  district  of  the  State  any  goods  whatever  other 
than  agricultural  products  and  articles  manufactured  in  the  State, 
either  by  card,  sample  or  other  specimen,  or  by  written  or  printed 
trade-list  or  catalogue,  whether  such  person  be  the  maker  or  manu- 
facturer thereof  or  not,  without  first  obtaining  a  license  so  to  do. 
Speaking  to  the  question  raised  by  such  act,  the  court  said : 

"Inasmuch  as  the  Constitution  provides  that  the  citizens  of  each  State 
shall  be  entitled  to  al]  privileges  and  immunities  of  citizens  in  the  several 


365 

States,  it  follows  that  the  defendant  might  lawfully  sell,  or  offer  or  expose 
for  sale,  within  the  district  described  in  the  indictment,  any  goods  which  the 
permanent  residents  of  the  State  might  sell,  or  offer  or  expose  for  sale  in 
that  district,  without  being  subjected  to  any  higher  tax  or  excise  than  that 
exacted  by  law  of  such  permanent  residents." 

Ward  v.  Maryland,  12  Wall,  at  430. 

Non-residents  are  for  like  reasons  entitled  to  purchase  leases 
and  buy  options  on  real  estate  in  the  State  of  Indiana,  and  to  hold 
them  subject  to  the  same  terms  and  conditions  that  residents  of  the 
State  purchase  and  buy  and  hold  them.  Restrictions  imposed  upon 
non-residents  in  this  behalf  which  are  not  imposed  upon  resident 
citizens,  are  clearly  within  the  inhibition  of  the  Constitution. 

A  statute  of  the  State  of  Oregon,  providing  for  the  assessment 
of  the  interest  vested  in  non-resident  mortgages  on  account  of 
mortgages  taken  upon  real  estate  in  such  State,  was  held  valid  by 
the  Supreme  Court  of  the  United  States ;  but  the  decision  is  based 
upon  the  fact  that  the  effort  of  the  law  was  not  the  assessment  of 
the  mortgage  or  instrument,  but  the  interest  in  the  real  estate 
vested  by  the  instrument  in  the  mortgagee,  the  Court  saying: 

"The  result  is  that  nothing  is  taxed  but  the  real  estate  mortgaged,  the 
interest  of  the  mortgagee  therein  being  taxed  to  him,  and  the  rest  to  the 
mortgagor.  There  is  no  double. taxation.  Nor  is  any  such  discrimination  made 
between  mortgagors  and  mortgagees,  or  between  resident  and  non-resident 
mortgagees,  as  to  deny  to  the  latter  the  equal  protection  of  the  laws." 
Savings  Society  v.  Multnomah  Co.,  169  U.  S.  at  425. 

An  act  of  the  State  of  Texas,  imposing  an  attorney's  fee  in 
addition  to  costs  upon  railway  corporations  omitting  to  pay  cer- 
tain claims  within  a  certain  time  after  presentation,  applying  to 
no  other  corporation  or  individuals,  was  held  unconstitutional, 
Mr.  Justice  Brewer,  in  the  course  of  the  opinion  handed  down  in 
the  case,  stating  the  rule  as  follows : 

"The  act  singles  out  a  certain  class  of  debtors  and  punishes  them  when  for 
like  delinquencies  it  punishes  no  others.  They  are  not  treated  as  other  debt- 
ors, or  equally  with  other  debtors.  They  cannot  appeal  to  the  courts  as  other 
litigants  under  like  conditions  and  with  like  protection.  If  litigation  termi- 
nates adversely  to  them,  they  are  mulcted  in  the  attorneys'  fees  of  the  suc- 
cessful plaintiff;  if  it  terminates  in  their  favor,  they  recover  no  attorneys' 
fees.  It  is  no  sufficient  answer  to  say  that  they  are  punished  only  when  ad- 
judged to  be  in  the  wrong.  They  do  not  enter  the  courts  upon  equal  terms. 
They  must  pay  attorneys'  fees  if  wrong;  they  do  not  recover  any  if  right; 
while  their  adversaries  recover  if  right  and  pay  nothing  if  wrong.  In  the 
suits,  therefore,  to  which  they  are  parties  they  are  discriminated  against,  and 
are  not  treated  as  others.  They  do  not  stand  equal  before  the  law,  They  do 


366 

not  receive  its  equal  protection.     All  this  is  obvious  from  a  mere  inspection 
of  the  statute." 

Gulf,  Colorado  &  Santa  Fe  Railway  Co.  v.  Ellis,  165  U.  S.  at  150. 

A  Tennessee  statute,  giving  preference  to  resident  creditors  as 
against  non-resident  creditors  in  case  of  insolvency  of  certain  cor- 
porations was  also  declared  invalid  by  the  United  States  Supreme 
Court.  After  citing  numerous  decisions,  it  is  said : 

"If  a  State  should  attempt,  by  statute  regulating  the  distribution  of  the 
property  of  insolvent  individuals  among  their  creditors,  to  give  priority  to 
ilic  claims  of  such  individual  creditors  as  were  citizens  of  that  State  over  the 
claims  of  individual  creditors,  citizens  of  other  States,  such  legislation  would 
be  repugnant  to  the  Constitution  upon  the  ground  that  it  withheld  from  citi- 
zens of  other  States  as  such,  and  because  they  were  such,  privileges  granted 
to  the  citizens  of  the  State  enacting  it. 

"We  hold  such  discrimination  against  citizens  of  other  States  to  be  repug- 
nant to  the  second  section  of  the  fourth  article  of  the  Constitution  of  th  ' 
TuiU'd  States." 

Blake  v.  McClunk,  172  U.  S.  252. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  5. 

MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

House  Bill  No.  5,  providing  for  changes  of  venue  from  police 
judges  to  justices  of  the  peace,  is  herewith  respectfully  returned 
without  executive  approval. 

The  present  law  provides  for  a  change  of  venue  from  the  police 
judge.  I  know  of  no  substantial  reason  why  there  should  be  pro- 
vision for  a  change  of  venue  from  a  police  court  to  a  justice  court. 
The  police  court  is  a  court  of  much  wider  and  greater  jurisdiction 
than  a  justice  court.  It  has  power  to  impose  penalties  and  to  ren- 
der judgments  which  justices  of  the  peace  do  not  have.  I  doubt 
the  propriety  of  a  change  of  venue  from  a  court  of  greater  to  a 
court  of  less  jurisdiction.  I  believe  the  enactment  of  the  present 
bill  would  seriously  embarrass  the  administration  of  the  criminal 
law  in  the  cities  of  the  State  in  many  instances.  The  accused,  in 
criminal  cases,  would  take  advantage  of  the  law  in  order  to  escape 
the  danger  of  substantial  punishment. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


367 
HOUSE  BILL  No.  75. 

MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  respectfully  return  herewith,  without  executive  approval, 
House  Bill  No.  75,  providing  for  the  establishment  and  mainte- 
nance of  county  agricultural  and  domestic  science  schools. 

As  drawn,  the  bill  applies  only  to  counties  having  a  population 
between  38,386  and  39,000,  a  difference  of  only  614.  This  is  such 
a  narrow,  arbitrary  and  unreasonable  classification  as  to  make  the 
bill  purely  local  in  character  and  to  bring  it  within  the  inhibition 
of  the  Constitution. 

Reasons  and  authorities  in  support  of  this  position  have  been 
given  in  executive  messages  heretofore  sent  to  the  Sixty-fifth  Gen- 
eral Assembly  relating  to  the  disapproval  of  other  special  acts. 
For  that  reason  they  are  not  now  reiterated. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  144. 


MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith,  without  executive  approval,  House  Bill  No. 
144,  to  authorize  and  encourage  the  construction  of  levees  and 
dykes  and  for  the  straightening  and  deepening  the  channels  of 
rivers  and  the  reclamation  of  wet  and  overflow  lands  by  incorpo- 
rated associations,  and  providing  for  the  organization  of  such  as- 
sociations and  prescribing  their  powers. 

The  law  creates  a  system  of  drainage  through  the  incorpora- 
tion of  associations,  in  the  board  of  directors  of  which  is  vested, 
after  the  construction  of  the  improvements  provided  for  therein, 
the  power  to  keep  in  repair  such  improvement  and  to  levy  an  as- 
sessment upon  the  lands  of  the  persons  assessed  for  the  construc- 
tion of  such  improvement,  for  the  purpose  of  meeting  the  expenses 
of  such  repair,  and  makes  it  the  duty  of  the  county  auditor  of  any 
county  in  which  any  such  lands  are  affected,  to  spread  upon  the 
tax  duplicate  such  assessments  when  certified  to  him  by  the  clerk 
of  such  association.  These  assessments  become  liens  upon  the  lands 


368 

against  which  they  are  assessed.  In  so  far  as  the  act  relates  to  as- 
sessments for  repairs,  it  provides  for  no  notice  of  such  assessment 
to  the  owners  of  any  lands  assessed,  and  no  provision  is  made  for 
a  hearing  or  for  an  appeal. 

The  levying  and  collection  of  such  assessments  would  be  the 
taking  of  property  without  due  process  of  law.  Notice  and  hearing, 
a  day  in  court,  are  fundamental  requisites  in  every  law  which  pro- 
vides for  the  levying  of  special  assessments  for  the  construction  of 
improvements.  Such  assessments  are  justified  only  upon  the 
grounds  of  benefits  conferred  upon  the  property  assessed.  Upon 
this  question  and  all  kindred  questions,  the  statute  to  be  valid  must 
provide  for  notice  and  for  an  appeal  and  a  hearing  before  some 
judicial  tribunal.  The  utter  failure  of  this  statute  in  this  regard 
makes  it  clearly  unconstitutional. 

Hille  v.  Neal,  32  Ind.  341 ; 

Davis  v.  Lake  Shore,  etc.,  Ry.  Co.,  114  Ind.  at  369. 

In  this  case  it  is  said,  "Notice  is  an  indispensable  requisite  to 
the  validity  of  the  proceedings." 

In  the  case  of  Jordan  v.  Lewis,  115  Ind.  at  492,  it  is  said: 
"The,  Constitution  sanctions  no  law  under  which  a  lien  can  be 
conclusively  imposed  upon  property  without  first  giving  the  owner 
notice,  and  affording  him  an  opportunity  to  be  heard  in  some 
tribunal  competent  to  administer  adequate  relief." 

See  also 

Kizer  v.  The  Town  of  Winchester,  141  Ind.  at  696. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  229. 

MARCH  13,  1907. 
Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  respectfully  return  herewith  House  Bill  No.  229  without  ex- 
ecutive approval. 

The  bill  relates  to  applications  for  a  new  trial  in  civil  causes, 
and  seeks  to  amend  section  422  of  an  act  concerning  practice  in 
civil  causes,  approved  March  7,  1881. 

The  title,  however,  wholly  fails  to  set  out  any  part  of  the  title 


369 

of  the  act  sought  to  be  amended.  In  fact,  the  title  purports  to  be 
a  title  to  a  general  bill,  but  the  body  of  the  bill  clearly  shows  that 
the  bill  is  wholly  amendatory  in  character. 

Section    19,   Article   IV,   of   the   State    Constitution,    requires 
that  the  subject  of  an  act  shall  be  expressed  in  its  title.     The  pres- 
ent bill,  wholly  failing  in  this  regard,  would  be  invalid  if  enacted. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  318. 


MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  318  without  executive  ap- 
proval. 

The  bill  provides  for  the  issuing  of  a  State  license  to  teachers 
having  an  average  scholarship  of  not  less  than  eighty-five  per  cent, 
in  the  branches  of  study  on  which  such  license  is  issued,  who  have 
taught  one  hundred  months  in  the  public  schools  of  the  State.  The 
present  law  requires  an  average  scholarship  of  not  less  than  ninety 
per  cent,  in  such  branches  of  study. 

The  effect  of  the  proposed  change  would  be  to  lower  the  stand- 
ard of  scholarship  required  for  such  license.  This  ought  not  to 
be  done.  This  is  especially  true  at  the  present  time.  The  legis- 
lation recently  enacted  makes  better  pay  possible  for  the  school 
teachers  of  the  State.  In  exchange  for  this  increased  wage  the 
State  is  entitled  to  higher  standards  and  greater  efficiency.  I 
therefore  withhold  my  approval. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


[24—19891] 


270 
HOUSE  BILL  No.  338. 


MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  herewith  respectfully  return  House  Bill  No.  338,  relating  to 
the  compensation  and  prescribing  the  duties  and  fixing  the  fees 
to  be  charged  by  county  sheriffs,  without  executive  approval. 

I  believe  the  present  law  provides  ample  compensation  for  the 
services  rendered  by  county  sheriffs.  Certain  fees  known  as  "in 
and  out  fees"  authorized  by  law  to  be  taxed  by  such  officers,  have 
been  held  to  be  the  property  of  the  respective  counties.  The  mat- 
ter, however,  is  still  in  litigation.  The  provisions  of  the  present 
bill  include  these  fees  and  make  them  the  property  of  the  sheriff. 
No  such  fees  ought  to  be  provided  for  in  the  statute,  and  I  am 
fully  convinced  that  where  they  are  provided  for  they  ought  to 
be  returned  to  the  treasury  of  the  county.  The  matter  will  prob- 
ably be  finally  settled  in  the  courts  without  great  delay,  and  such 
fees  may  be  construed  to  be  the  property  of  the  sheriff.  If  so, 
there  will  be  no  need  for  this  legislation  even  from  the  standpoint 
of  the  sheriff.  If  it  is  not  decided  that  they  are  the  property  of 
the  sheriff,  I  have  no  doubt  whatever  that  the  people  of  the  State 
will  be  satisfied  that  they  shall  be  returned  to  the  several  local 
treasuries. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  376. 


MARCH  13,  1907. 
Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith,  without  executive  approval,  House  Bill.  No. 
376.  From  a  careful  reading  of  the  title  of  the  bill  and  the  word- 
ing of  the  context  of  the  body  thereof,  it  is  evident  that  the  in- 
tention of  the  General  Assembly  was  to  amend  an  "Act  supple- 
mental to  an  act  entitled  'An  act  to  authorize  aid  to  the  construc- 
tion of  railroads  by  counties  and  townships  taking  stock  in  and 
makmg  donations  to,  railroad  companies,"5  approved  May  12, 

'  ooV/. 

The  words  "An  act  supplemental  to  an  act"  are  omitted  from 


•  »>ry  i 

o71 

the  title,  causing  it  to  read  "An  act  to  amend  section  one  of  an  act 
approved  March  9,  1903,  entitled  'An  act  to  authorize  aid  to  the 
construction  of  railroads,'  "  etc. 

The  effect  of  the  omission  is  to  amend  the  original  act  rather 
than  the  supplemental  act.  This  defect  I  believe  to  be  such  as  to 
invalidate  the  bill  should  it  become  a  law,  and  certainly  such  as  to 
prevent  it  from  amending  the  section  of  the  act  really  sought  to 
be  amended.  I  therefore  decline  to  give  it  executive  approval. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No. 


MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  respectfully  return  herewith,  without  executive  signature, 
House  Bill  No.  393,  "to  repeal  an  act  entitled  an  act  concerning 
the  payment  of  taxes  assessed  upon  omitted  property  and  provid- 
ing the  manner  in  which  the  costs  of  collecting  the  same  shall  be 
paid,  approved  February  17,  1905." 

The  act  sought  to  be  repealed  authorizes  boards  of  county  com- 
missioners in  this  State  to  "make  contracts  for  the  discovery  of, 
and  report  for  assessment  and  taxation,  omitted  property  and  cause 
the  taxes  to  be  collected  upon  the  same,"  and  to  deduct  "from  the 
gross  amount  of  said  taxes  so  collected  the  total  cost  and  expense 
of  such  investigation  and  collection." 

Under  the  provisions  of  this  act  many  contracts  have  been  made 
by  the  several  boards  of  commissioners  of  the  State  for  the  dis- 
covery anoT  report  and  assessment  of  sequestered  property  which 
has  for  years  escaped  taxation.  The  aggregate  amount  of  such 
property  placed  upon  the  tax  duplicate  in  the  last  two  years  is 
very  large.  Evidence  of  the  sequestration  has  not  been  readily 
found.  It  has  been  necessary  to  gather  it  from  many  and  often- 
times distant  sources.  Little  of  the  property  thus  discovered  would 
ever  have  reached  the  tax  duplicate  but  for  these  contracts  and  the 
work  done  under  them.  The  man  who  reports  his  property  and 
pays  his  taxes  is  entitled  to  have  his  neighbor  do  the  same.  The  act 
of  1905  lias  resulted  in  compelling  the  payment  of  just  taxes  by 
many  persons  who  have  been  evading  the  duty  imposed  upon  them 
in  this  regard  by  the  laws  of  the  State. 


372 

I  believe  the  act  to  be  in  the  interests  of  equal  taxation  and  of 
sound  public  policy.     I  therefore  decline  to  assent  to  its  repeal. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  443. 

MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith,  without  executive  approval,  House  Bill  No. 
443,  relating  to  circulating  libraries  "in  any  city  of  this  State  hav- 
ing a  population  of  more  than  20,000  as  shown  by  the  United 
States  Census  of  A.  D.  1900." 

The  limitation  to  the  census  of  1900  makes  the  bill  clearly  spe- 
cial, and  brings  it  within  the  inhibition  of  the  Constitution  as 
heretofore  shown  in  other  executive  messages  filed  with  the  re- 
spective houses  of  the  present  General  Assembly,  and  withholding 
executive  approval  from  measures  attempting  to  make  similar  classi- 
fications. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  518. 


MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  518  without  executive  ap- 
proval. 

The  bill  relates  to  the  raising  of  funds  for  the  purchase  of 
school  sites  and  the  erection  of  buildings  thereon  in  towns  having 
a  population  of  not  more  than  500,  according  to  the  last  preceding 
United  States  census. 

The  classification  made  is  narrow,  arbitrary  and  unreasonable. 
The  bill  is  clearly  local  and  special,  and  within  the  inhibition  of 
Section  22,  Article  IV,  of  the  State  Constitution.  Reasons  and 
authorities  supporting  this  view  have  been  given  at  greater  length 
in  executive  messages  relating  to  the  disapproval  of  other  local 


373 

and  special  measures,  sent  to  each  House  of  the  General  Assembly 
from  time  to  time  during  its  late  session,  and  for  that  reason  they 
are  not  now  reiterated. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  541. 


MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  541  without  executive  ap- 
proval. 

This  bill  is  invalid.  It  is  local  and  special  legislation,  affecting 
taxes  levied  and  collected  "for  the  purpose  of  building  a  county 
line  gravel  road  between  Hobart  Township,  in  Lake  County,  and 
Portage  Township,  in  Porter  County,  Indiana,  said  road  not  be- 
ing built  because  the  law  was  declared  illegal,"  and  is  inhibited  by 
Section  22  of  Article  4  of  the  State  Constitution.  It  applies  to 
Lake  County  only  by  name  and  to  a  specific  township  in  said 
county.  The  precise  question  involved  is  decided  in  the  case  of 
Board  v.  Spangler,  159  Ind.  at  page  582,  in  which  it  is  declared: 

"The  attempts  to  validate  the  contracts  and  the  assessment  of  taxes  to 
pay  the  bonds  upon  their  maturity  were  aborted  because  of  the  special  and 
local  character  of  the  act." 

In  this  case  the  Legislature  sought  to  except  Owen  County 
from  a  gravel  road  act.  The  county  was  not  specifically  named 
as  in  this  instance,  but  the  exception  included  counties  having  be- 
tween 15,000  and  15,050  inhabitants.  The  court  held  the  classifi- 
cation was  so  narrow  as  to  apply  only  to  Owen  County,  and  that 
it  was  invalid  for  that  reason. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor, 


HOUSE  BILL  No.  540. 

MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith,  unsigned,  House  Bill  No.  540,  the  same 
being  a  bill  to  authorize  and  empower  the  auditor  and  treasurer 
of  Lake  County,  Indiana,  "to  divert  and  apply  and  pay"  certain 
gravel  road  taxes  levied  and  collected  in  said  county  and  now  in 
the  hands  of  the  treasurer  thereof  "toward  the  building  of  the 
Swanson  et  al.,  gravel  road,"  in  Hobart  Township,  in  said  county. 
The  preamble  recites  that  the  taxes  were  levied  and  collected  to 
pay  the  bonds  issued  for  the  construction  of  a  public  gravel  road 
in  Hobart  Township,  known  as  the  Swanson  et  al.,  road,  and 
that  "said  road  was  not  built  at  said  time  owing  to  some  illegality 
in  regard  to  the  bonds  issued  therefor,  which  prevented  them  from 
selling";  and  that  "said  road  was  again  voted  for  and  carried  in 
1906,  and  bonds  therefor  were  issued  and  sold,  and  said  road  is 
now  in  process  of  construction  in  said  township." 

This  statute  is  in  violation  of  Section  22  of  Article  4  of  the 
State  Constitution.  It  applies  to  Lake  County  and  Hobart  Town- 
ship by  name.  It  is  therefore  clearly  local.  Under  the  authority 
cited  in  the  message  of  disapproval  of  House  Bill  No.  541,  I  am 
compelled  to  withhold  executive  approval. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  555. 


MARCH  13,  1907. 
Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  herewith  respectfully  return  House  Bill  No.  555,  entitled  "An 
act  for  the  protection  of  the  sources  of  supply  of  water  furnished 
and  used  by  any  municipality  and  the  inhabitants  thereof,  provid- 
ing a  penalty  for  its  violation,  and  declaring  an  emergency,"  with- 
out executive  approval. 

The  bill  makes  it  "unlawful  for  any  person,  firm  or  corpora- 
tion to  dig,  construct,  maintain  and  operate  any  well  or  wells  in 
State  within  three  thousand  feet  of  any  well  or  wells  now  or 
hereafter  constructed,  maintained  and  operated  by  any  municipal 


375 

water  works  plant  or  by  any  person,  firm  or  corporation  holding 
the  right  or  privilege  to  operate  a  system  of  water  works  in  and 
actually  engaged  in  furnishing  water  to  and  for  any  incorporated 
city  or  town  and  the  inhabitants  thereof,"  except  "for  household 
or  agricultural  purposes  or  for  use  in  manufacturing  or  operating 
any  railroad  where  the  same  does  not  interfere  with  the  supply  of 
such  water  works  system." 

I  doubt  both  the  constitutionality  and  the  propriety  of  these 
provisions,  and  therefore  withhold  from  them  my  approval. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

^Governor. 

HOUSE  BILL  No.  602. 


MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  602,  "An  act  concerning  the 
vacation  of  plat  or  plats  and  any  part  thereof,"  without  executive 
approval. 

The  title  of  the  bill  is  defective.  I  have  already  signed  Senate 
Bill  No.  133  covering  the  same  subject. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  603. 


MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

House  Bill  No.  603  is  herewith  returned  without  executive  sig- 
nature. 

The  title  of  the  act  seeks  to  amend  Sections  1  and  6  and  to  re- 
peal Section  2  of  an  act  concerning  drilling,  operating,  maintain- 
ing and  abandoning  gas  and  oil  wells,  approved  March  7,  1903. 

The  body  of  the  act  amends  Section  3  of  the  act  of  March  7, 
1903.  This  is  not  mentioned  in  the  title.  A  supplemental  section 
creating  certain  misdemeanors  and  prescribing  punishment  there- 
for is  added  in  the  body  of  the  bill,  and  no  mention  of  this  is  made 
in  the  title. 


376 

The  Constitution  (Section  19  of  Article  IV)  requires  that  the 
subject-matter  of  an  act  shall  be  expressed  in  its  title.  The  pro- 
posed bill  fails  to  comply  with  this  requirement  and  is,  therefore, 

invalid. 

Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  629. 


MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

House  Bill  No.  629,  entitled  "An  act  retaliatory  and  reciprocal 
concerning  life  insurance  companies,"  is  herewith  returned  with- 
out executive  approval. 

The  retaliatory  provisions  of  the  bill  are  unnecessary  and  un- 
called for.  The  present  law  provides  for  reciprocal  insurance  fees, 
and  its  terms  are  sufficiently  broad  to  cover  every  legitimate  in- 
terest either  of  the  State  or  of  its  insurance  companies.  As  a  rule, 
retaliatory  legislation  of  any  kind  as  between  the  several  States 
of  the  Union  is  unwise  and  not  in  accord  with  sound  public  policy. 
The  examinations  of  a  number  of  insurance  departments  consist 
simply  in  a  comparison  of  totals  with  no  expert  analysis  of  the 
minutiae  of  detail  that  enter  into  the  accountings  of  insurance 
companies,  and  I  do  not  believe  the  insurance  departments  of  other 
States  can  justly  be  required  to  accept  the  certificate  of  the  depart- 
ment of  this  State  as  conclusive  evidence,  nor  do  I  believe  failure 
to  accept  such  certificate  can  justly  be  made  the  ground  of  refusal 
to  permit  companies  of  such  States  to  do  business  in  the  State  of 
Indiana. 

The  commissioner  of  each  individual  State  should  be  free  to 
make  such  examination  of  the  affairs  of  any  company  asking  ad- 
mission to  his  State,  as  shall  seem  to  him  necessary  to  a  full  under- 
standing of  its  affairs.  This  is  especially  true  as  to  the  amount 
and  character  of  its  resources,  and  the  extent  of  its  liabilities,  and 
the  integrity  of  its  administration. 

Believing  the  present  law  to  be  ample  in  this  respect  and  its 
provisions  to  be  fairer  and  wiser  than  the  provisions  of  this  bill,  I 
feel  it  my  duty  to  withhold  executive  approval. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


377 
HOUSE  BILL  No.  663. 


MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  663  without  executive  ap- 
proval. 

The  bill  relates  to  fees  of  county  clerks,  and  provides  that  all 
fees  collected  from  the  county  treasury  as  named  therein  shall  be 
the  property  of  such  clerks.  I  believe  this  to  be  the  law  now  un- 
der the  decisions  of  the  Supreme  Court  of  the  State. 

The  bill  also  provides  that  compensation  for  making  copies  of 
papers  and  pleadings  required  of  the  clerk  of  the  circuit  court,  ex- 
cept the  certificate  fee,  shall  belong  to  the  clerk.  These  fees  un- 
der the  present  law  belong  to  the  county,  and  are  required  to  be 
paid  into  its  treasury.  The  provision  seems  to  me  a  wise  and  a 
proper  one.  The  several  county  clerks  of  the  State  are  well  paid 
under  the  provisions  of  existing  statute,  and  I  do  not  believe  their 
compensation  ought  to  be  augmented.  Recent  legislation  has  all 
tended  toward  the  elimination  of  the  fee  system.  It  has  been  sought 
to  put  all  officers  upon  fixed  salaries.  This  tendency  is  a  proper 
one.  No  backward  step  should  be  taken.  I  therefore  deem  it  my 
duty  to  withhold  executive  approval  from  the  present  measure. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 

HOUSE  BILL  No.  679. 


MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith,  without  executive  approval,  House  Bill  No. 
679,  amending  Sections  1  and  4  of  the  State  tax  levy  act,  approved 
March  4,  1905. 

By  the  provisions  of  that  act  the  State  sinking  fund  levy  of 
three  cents  was  transferred  to  the  general  fund  levy,  thereby  rais- 
ing such  levy  to  12  cents  for  the  years  1905,  1906  and  1907.  The 
evident  intention  of  the  General  Assembly,  in  passing  the  present 
bill,  was  to  leave  such  levy  undisturbed.  It  fails,  however,  to  carry 
out  its  intention.  It  seeks  to  amend  the  section  of  the  act  of  1905 
making  the  levy  for  the  years  1907  and  1908,  but  the  amended 
section  relates  only  to  the  year  1909.  The  effect  of  this  would  be 


378 

to  strike  down  the  levy  as  fixed  in  the  act  of  1905  and  leave  no 
levy  whatever  for  the  general  fund  for  the  year  1908.     I  am  there- 
fore compelled  to  withhold  executive  approval. 
Respectfully  submitted, 

J.  FRANK  HANI.Y, 

Governor. 

HOUSE  BILL  No.  711. 


MARCH  13,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith,  without  executive  approval,  House  Bill  No. 
711,  providing  "that  any  person  having  the  ownership  of  real 
estate  liable  for  taxation  within  the  State  of  Indiana,  and  being 
indebted  in  any  sum,  secured  by  mortgage  upon  real  estate,  may 
have  the  amount  of  such  mortgage  indebtedness,  not  exceeding 
$1,200.00,  existing  and  unpaid  upon  the  first  day  of  March  of 
any  year,  deducted  from  the  assessed  valuation  of  the  mortgage 
premises  for  that  year  *  *  *  provided  that  no  deduction 
shall  be  allowed  greater  than  one-half  of  such  assessed  valuation 
of  said  real  estate." 

The  present  law  exempts  $700.00.  Under  it  last  year  $48,- 
048,455  of  property  was  omitted  from  taxation.  The  present  bill 
increases  the  exemption  to  $1,200.00.  Based  on  the  exemption  of 
last  year,  it  would  mean  an  increased  exemption  of  $35,000,000, 
or  a  total  of  more  than  $83,000,000. 

The  statute  has  led  to  widespread  abuse  throughout  the  State. 
Many  fictitious  mortgages  have  been  executed  and  placed  of  record 
for  the  purpose  of  securing  this  exemption — mortgages  from  hus- 
band to  wife,  wife  to  husband,  father  to  son,  son  to  father,  have 
been  frequent.  These  facts  are  familiar  to  the  taxing  officers  of 
the  State,  and  especially  to  the  members  of  the  State  Board  of  Tax 
Commissioners.  If  the  present  bill  were  to  become  a  law,  it  would 
but  increase  the  temptation  in  this  behalf.  A  limit  to  mortgage 
exemptions  must  be  reached  somewhere,  unless  the  General  Assem- 
bly intends  to  provide  for  the  exemption  of  the  mortgage  indebt- 
edness of  all  flu-  citi/ens  of  the  State,  whatever  its  magnitude. 

Believing  that  this  limit   should   not  exceed    the  sum    named    in 
the  present   statute,   I  cannot   assent  to  its  incrensv. 
Respect  fully  submitted, 

J.  FRANK  HANLY, 

Governor. 


379 
HOUSE  BILL  No.  633. 


MARCH  16,  1907. 

Mr.  Speaker  and  Gentlemen  of  the  House  of  Representatives: 

I  return  herewith  House  Bill  No.  633  without  executive  ap- 
proval. 

The  title  of  the  bill  reads  as  follows :  "An  act  concerning  the 
government  of  school  cities  having  more  than  25,000  and  less  than 
36,500  population,  according  to  the  last  preceding  United  States 
census,  and  matters  connected  therewith,  and  declaring  an  emer- 
gency." 

The  body  of  the  act,  however,  provides :  "That  all  school  cities 
of  this  State  which  have  a  population  of  more  than  25,000  and 
not  less  than  36,500  inhabitants,  as  shown  by  the  last  preceding 
United  States  census,  shall  be  governed  by  the  provisions  of  this 
act." 

It  was  evidently  intended  that  the  bill  should  apply  to  cities 
having  a  population  of  not  less  than  25,000  and  not  more  than 
36,500  inhabitants.  The  words  of  classification,  however,  used  in 
the  body  of  the  act  make  it  apply  only  to  cities  having  36,500  or 
more  inhabitants.  This  includes  all  the  large  cities  of  the  State — 
a  thing  that,  in  my  judgment,  was  not  intended  by  the  Legislature, 
and  of  which  the  people  of  these  cities  had  no  notice. 

The  error  seems  to  have  crept  into  the  bill  upon  enrollment.  I 
am  not  opposed  to  the  provisions  of  the  bill,  and  if  it  applied  to 
the  class  of  cities  to  which  it  was  intended  to  apply,  I  should 
be  inclined  to  give  it  my  approval.  I  do  not  believe  I  am  justified, 
however,  under  the  circumstances,  in  signing  it. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


Senate  Veto  Message,  Special  Session 
of  Sixty- Fifth  General  Assembly 


(381 1 


383 


SENATE  ENROLLED  ACT  No.  561. 

OCTOBER  5,  1908. 
Mr.  President  and  Gentlemen  of  the  Senate: 

I  find  Senate  Enrolled  Act  No.  561,  the  same  being  "An  act  to 
amend  Section  2  of  an  act  entitled  'An  act  concerning  coal  mines, 
and  to  provide  for  the  health  and  safety  of  persons  employed  in 
coal  mines,  and  matters  connected  therewith,  and  providing  pen- 
alties, and  repealing  all  laws  in  conflict  therewith,'  approved 
March  9,  1907,"  to  be  in  every  substantial  particular  identical  with 
House  Enrolled  Act  No.  374. 

I  have  signed  said  House  act.     I  therefore  withhold  executive 
signature  from  said  Senate  act,  as  no  particular  purpose  could  be 
effected  by  two  identical  acts  upon  the  same  subject. 
Respectfully  submitted, 

J.  FRANK  HANLY, 

Governor. 


Proclamations 


IL'5— 19891  ]  (385) 


ARBOR  DAY 


ARBOR    DAY,    1905. 


UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation: 

The  planting  of  trees  is  a  public  benefaction.  Whosoever 
plants  one  makes  the  earth  more  habitable  and  a  happier  place  in 
which  to  dwell,  and  thereby  earns  the  grateful  praise  of  coming 
generations. 

Believing  that  systematic  and  persistent  effort  wrill  restore  in 
some  measure  the  all  but  inexhaustible  and  limitless  forest  which 
once  covered  the  larger  portion  of  the  area  of  this  Commonwealth, 
but  which  is  now  gone;  and  in  conformity  to  a  law  solemnly 
enacted  and  approved,  I,  J.  Frank  Hanly,  Governor  of  the  State 
of  Indiana,  do  hereby  designate  and  proclaim  Friday,  April  21, 
and  Friday,  October  20,  1905,  as  Arbor  Days,  to  be  observed 
throughout  the  State  by  the  planting  of  trees  and  shrubs  upon 
the  grounds  about  all  public  buildings  and  public  institutions  and 
upon  the  public  highways,  as  well  as  upon  grounds  about  private 
homes,  for  their  adornment  and  beautification. 

Each  of  said  days  is  hereby  designated  and  set  apart  as  a  day 
of  rest  and  celebration  by  all  the  people. 

Those  in  charge  of  the  schools  of  the  State,  whether  public  or 
private,  are  hereby  recommended  and  urged  to  observe  each  of  said 
days,  in  so  far  as  the  same  may  be  practicable,  by  public  exercises 
of  a  character  calculated  to  teach  their  respective  pupils  the  wis- 
dom and  necessity  of  the  planting,  the  culture  and  the  care  of 
trees. 

By  so  doing  we  will  add  to  the  beauty,  the  wealth  and  the 
resources  of  the  State  and  to  our  own  culture  and  happiness. 

Done  at  the  Capitol  of  Indiana,  in  the  City  of  Indianapolis,  this 
first  day  of  April,  in  the  year  of  our  Lord,  nineteen  hundred  and 
five,  in  the  year  of  the  Independence  of  the  United  States  the  129th 
and  of  the  State  of  Indiana  the  89th. 

J.  FRANK  HANLY, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor : 

DANIEL  E.   STORMS, 

Secretary  of  State. 

(387) 


388 


ARBOR    DAY,    1906. 

UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation : 

In  accordance  with  custom,  and  in  the  interest  of  forestry  cul- 
tivation, I,  J.  Frank  Hanly,  Governor  of  the  State  of  Indiana, 
do  hereby  designate  and  proclaim  Friday,  April  27,  and  Friday, 
October  26,  1906,  as  Arbor  Days,  and  earnestly  recommend  that 
each  of  said  days  be  observed  by  the  people  throughout  the  State 
as  a  day  of  rest  and  celebration ;  that  these  days  be  characterized 
by  the  planting  of  trees  and  shrubs  upon  the  grounds  about  public 
buildings  and  public  institutions,  upon  public  highways  and  about 
private  homes. 

It  is  further  recommended  to  those  in  charge  of  the  schools  of 
the  State,  both  public  and  private,  that  each  of  said  days  be  ob- 
served, as  far  as  practicable,  by  public  exercises  of  a  character 
calculated  to  impress  their  respective  pupils  with  the  wisdom  and 
necessity  of  the  planting,  the  culture  and  the  care  of  trees. 

Let  us  add  to  the  beauty  and  the  adornment  of  our  public 
grounds,  our  public  highways  and  our  own  homes  by  a  general 
observance  of  the  recommendations  herein  made,  that  those  who 
come  after  us  may  inherit  a  land  of  tree  and  shrub,  of  flower  and 
fruit. 

Done  at  the  Capitol  of  Indiana,  in  the  City  of  Indianapolis, 
this  18th  day  of  April,  in  the  year  of  our  Lord,  nineteen  hun- 
dred and  six,  in  the  year  of  the  Independence  of  the  United  States 
the  130th  and  of  the  State  of  Indiana  the  90th. 

J.  FRANK  HANLY, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor : 

FRED  A.  SIMS, 

Secretary  of  State. 


ARBOR    DAY,    1907. 


UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation : 

The  mysteries  of  the  changing  seasons  are  about  us.  Budding 
foliage,  bursting  flowers  and  fragrant  blossoms  are  everywhere. 
The  air  is  vibrant  with  the  babble  of  many  waters  and  with  the 
cries  and  songs  of  nestling  birds.  April — changing,  fickle,  win- 
some April — sits  again  "At  the  loom  of  Spring,"  weaving  of  air 
and  sunlight  and  of  dew  and  shower  a  thousand  "wonder  fabrics." 
Unseen  but  vital  and  mysterious  forces  are  revivifying  the  earth 
and  calling  unto  us  to  join  in  Nature's  annual  triumph  over  death. 

To  this  call  we  can  make  no  more  appropriate  answer  than  to 
set  apart  a  day  for  the  celebration  of  the  return  of  this  glad  new 
season,  and  for  the  planting  of  trees  and  shrubs.  Every  tree 
planted  makes  the  earth  more  habitable  and  a  happier  place  in 
which  to  dwell.  It  adds,  also,  to  the  material  welfare  of  the  State. 

Therefore,  in  accordance  with  precedent  and  custom,  and  in 
keeping  with  the  moving  and  impelling  forces  about  us,  I,  J.  Frank 
Hanly,  Governor  of  the  State  of  Indiana,  do  hereby  designate,  set 
apart  and  proclaim  Friday,  April  26,  and  Friday,  October  25, 
1907,  as  Arbor  Days,  and  recommend  that  each  of  said  days  be 
observed  by  the  people  of  the  Commonwealth  as  a  day  of  rest  and 
celebration ;  that  the  ceremonies  incident  to  the  celebration  of  these 
days  be  characterized  by  the  planting  of  trees  and  shrubs  upon  the 
grounds  about  public  buildings  and  public  institutions,  upon  the 
public  highways  and  about  private  homes ;  that  those  in  charge  of 
the  benevolent  institutions  of  the  State  give  recognition  to  these 
days  by  fitting  observance,  and  that  the  schools,  public  and  private, 
observe  them,  as  far  as  practicable,  by  public  exercises  of  such  a 
character  as  will  give  the  children  of  the  State  a  better  understand- 
ing and  a  higher  appreciation  of  tree  and  bird  life. 

Let  this  be  done  in  the  interest  of  forestry  cultivation,  and  with 
a  view  to  adding  to  the  beauty  and  the  wealth  and  resources  of  the 
State,  and  to  our  own  culture  and  happiness  and  the  culture  and 
happiness  of  our  children.  To  him  who  understands  the  life  of 
tree  and  bird  and  the  lessons  taught  by  them  "The  whispering 


390 

grove  a  holy  temple  is,"  and  every  bird  that  lias  the  gift  of  song, 
God's  messenger. 

Done  at  the  Capitol  of  Indiana,  in  the  City  of  Indianapolis, 
this  sixteenth  day  of  April,  in  the  year  of  our  Lord,  nineteen  hun- 
dred and  seven,  in  the  year  of  the  Independence  of  the  United 
States  the  131st  and  of  the  State  of  Indiana  the  91st. 

J.  FRANK  HANLY, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor : 

FRED  A.  SIMS, 

Secretary  of  State. 


ARBOR    DAY,    1908. 

UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation : 

One  October  morning  fifteen  hundred  years  ago  the  people — 
men,  women  and  children — of  the  little  Swiss  town  of  Brugg 
marched  to  the  forest  and  each  digged  up  a  young  tree  and  trans- 
planted it  to  the  village  commons.  The  trees  grew  and  in  after 
years  made  happy  the  children  of  those  who  planted  them. 

In  1872  this  ancient  act  of  tree  planting  was  repeated  by  the 
people  of  an  American  commonwealth — Nebraska.  Since  then  it 
has  become  an  annual  event  throughout  the  Union.  In  our  own 
State  both  law  and  custom  sanction  the  setting  apart  of  two  days 
for  this  purpose  each  year,  one  in  the  Spring  and  one  in  the  Au- 
tumn. 

Therefore,  I,  J.  Frank  Hanly,  Governor  of  the  State  of  In- 
diana, do  hereby  designate  and  proclaim  Friday,  April  24,  and 
Friday,  October  23,  1908,  as  Arbor  Days,  and  recommend  that 
they  be  observed  as  such  by  the  people  of  this  Commonwealth. 

For  more  than  a  century  we  have  been  a  tree-destroying  peo- 
ple. We  have  denuded  the  land,  impoverished  ourselves  and  dissi- 
pated the  patrimony  of  our  children.  By  planting  trees  and 
shrubs  on  grounds  about  public  buildings,  schoolhouses,  colleges 
and  state  institutions,  upon  public  highways,  along  streams  and 


391 

public  parks  and  on  village  commons,  on  farms,  in  gardens  and 
about  country  homesteads,  we  shall  in  part  atone  for  the  waste 
of  the  past  and  make  some  provision  for  the  needs  of  the  future. 

The  need  in  this  direction  for  sytematic,  well-directed  effort 
is  imperative.  A  treeless  land  is  a  desolate  land,  exposed  to  ex- 
tremes of  heat  and  cold,  of  flood  and  drought. 

Nature's  grandeur  finds  its  highest  expression  in 

"A  living  monumental  tree, 
True  type  of  immortality"; 

"A  nobler  object  than  a  king  in  his  coronation  robes." 

Beauty,  strength  and  majesty  all  are  there.  Its  drapery  of 
green,  murmuring  leaves  and  whispering  boughs  invite  both  youth 
and  age,  the  one  to  "love's  millennial  morn" ;  the  other  to  rest  in 
solemn  contemplation.  Religion,  poetry  and  history  consecrate 
and  hallow  it  as  though  it  were  a  temple.  Amid  its  clustering 
foliage  the  "low  love  language"  of  birds  is  heard,  and  "soft, 
soul-like  sounds"  that  catch  and  hold  the  ear. 

Within  its  cooling  shadows  lowing,  gentle  herds  of  kine  seek 
content  and  ease,  and  tired  and  weary  laborers  find  repose.  Be- 
neath its  spreading,  wind-tossed  branches  light-hearted,  care-free 
children  laugh  and  romp. 

The  observance  of  these  days  is  helpful  now  to  us,  but  in  keep- 
ing them  we  look  beyond  the  present  to  future  ages.  We  plant 
not  for  ourselves,  but  for  posterity. 

Let  us  cease  to  be  a  tree-destroying  people  and  become  a  tree- 
planting,  tree-preserving  people.  Let  those  in  charge  of  the  edu- 
cational and  benevolent  institutions  of  the  State  give  fitting  recog- 
nition to  these  days ;  let  all  schools,  public  and  private,  observe 
them.  Let  memorial  trees  be  planted  in  memory  of  the  Nation's 
departed  great,  and  forests  started  to  adorn  and  enrich  the  land. 

Done  at  the  Capitol  of  Indiana,  in  the  City  of  Indianapolis, 
this  13th  day  of  April,  in  the  year  of  our  Lord,  nineteen  hundred 
and  eight,  in  the  year  of  the  Independence  of  the  United  States 
the  132d,  and  in  the  year  of  the  admission  of  the  State  of  Indiana 
the  92d. 

J.  FRANK  HANI>Y, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor : 

FRED  A.  SIMS, 

Secretary  of  State. 


392 


MEMORIAL  DAY 


MEMORIAL    DAY,    1905. 


UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation: 

In  pursuance  of  established  custom,  in  obedience  to  formal  legis- 
lative enactment,  in  memory  of  past  sacrifices  and  in  acknowledg- 
ment of  exalted  services  unselfishly  rendered,  I,  J.  Frank  Hanly, 
Governor  of  the  State  of  Indiana,  do  hereby  appoint,  set  apart 
and  proclaim  Tuesday,  the  thirtieth  day  of  May,  1905,  as  Memorial 
Day. 

And  I  also  do  hereby  sincerely  recommend  that  the  day  be  de- 
voutly observed  throughout  the  State  by  all  the  people  in  com- 
memoration of  the  devotion,  the  valor  and  achievements  of  our 
soldier  dead,  wheresoever  and  in  whatsoever  war  they  fell  and 
wheresoever  they  may  rest. 

They  are  dead.  The  inanimate  soil  of  a  continent,  the  multi- 
plying sands  of  the  islands  of  the  seas,  and  the  solemn  waters  of 
the  great  deep  cover  their  silent  forms,  but  their  memories  still  live 
and  are  ever  present  in  the  thought  and  heart  of  a  virile  and  a 
mighty  people,  and  their  souls  still  go  marching  on,  inspiring  and 
impelling  us,  their  countrymen,  to  acts  of  patriotism,  to  love  of 
country  and  to  obedience  to  its  laws. 

They  are  dead.  They  died  for  the  rights  of  man.  They  died 
for  free  institutions.  They  died  to  preserve  the  solidarity  of  the 
Nation.  They  died  for  liberty  buttressed  by  law. 

And  now,  lest  we  forget  the  things  for  which  they  died,  let  us 
every  one  desist  from  our  several  occupations  on  this  day.  Let 
business  cease.  Let  public  offices  be  closed.  Let  us  devote  the  day 
to  sacred  memories  and  consecrate  it  to  holy  purposes.  Let  it  be 
a  day  of  tribute  to  the  dead  and  a  day  of  honor  to  the  living.  Let 
music  and  song,  oratory  and  flowers,  testify  the  sincerity  of  our 
gratitude  and  be-speak  the  constancy  of  our  love.  Let  the  flag, 
beneath  whose  folds  they  marched  to  death  and  glory,  be  seen  at 
half  mast  on  every  public  building  and  about  the  portals  of  every 


393 

*, 

priyate  home.  Let  the  children  participate  in  the  public  cere- 
monies of  the  day.  Let  them  It-am  from  what  we  say  and  do  and 
from  the  sincerity  of  our  devotion  the  value  of  free  institutions 
and  of  the  goodly  land  in  which  they  live,  and  which  is  soon  to  be 
given  into  their  k.eeping. 

Let  the  thoughtless,  the  careless  and  the  gay  refrain  from 
frivolous  and  noisy  amusements  and  pastimes  and  give  one  day 
to  the  consideration  of  the  verities  of  life  and  its  obligations. 

Let  the  unworthy  and  the  dissolute  remember  the  day  and  in- 
fract not  the  law. 

Let  us  all,  everywhere  and  everyone,  come  with  clean  hands 
and  pure  hearts,  and  in  shoes  of  sandalwood  make  public  acknowl- 
edgment of  the  debt  of  gratitude  we  owe  them,  and  in  the  presence 
of  one  another  Tet  each  renew  his  high  resolve  to  preserve  the  in- 
heritance they  have  left  us. 

Such  an  observance  of  the  day  as  is  herein  recommended  will 
do  more  than  honor  the  dead — it  will  be  helpful  to  the  living,  it  will 
lift  us  to  higher  citizenship,  and  will  go  far  toward  vindicating  the 
right  of  popular  government  to  endure. 

Done  at  the  Capitol  in  Indianapolis,  and  given  under  my  hand 
and  the  Great  Seal  of  the  State,  this  12th  day  of  May,  in  the  year 
of  our  Lord,  nineteen  hundred  and  five,  in  the  year  of  the  Inde- 
pendence of  the  United  States  the  129th,  and  in  the  year  of  the 
admission  of  the  State  of  Indiana  the  89th. 

J.  FRANK  HANLY, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor : 

DANIET,  E.  STORMS, 
Secretary  of  State. 


394 
MEMORIAL    DAY,    1906. 

UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation: 

In  the  name  of  our  soldier  dead,  in  acknowledgement  of  their 
transcendent,  service,  and  in  memory  of  their  exalted  devotion  and 
unexampled  sacrifices,  I,  J.  Frank  Hanly,  Governor  of  the  State  of 
Indiana,  do  hereby  designate  and  set  apart  Wednesday,  the  thir- 
tieth day  of  May,  1906,  as  Memorial  Day. 

It  is  fitting  that  we  pause  in  •  the  glad  springtime,  when  the 
earth  is  filled  with  the  laughter  of  children,  with  the  songs  of  birds 
and  the  murmur  of  hurrying  waters,  and  beautified  by  flower  and 
vine  and  shrub  and  tree  and  field  and  sky,  and  turn  for  one  day 
from  the  varied  cares  and  complex  activities  of  our  daily  lives,  to 
count  again  the  cost  of  freedom  and  recall  the  valor  of  those  who 
saved  the  land  and  kept  the  flag. 

Let  us  make  this  the  holiest  day  in  the  calendar  of  all  the  years 
— sacred  as  the  cause  for  which  they  died.  Let  toil  be  discontinued. 
Let  business  cease.  Let  all  public  offices  be  closed.  Let  the  flag 
be  seen  everywhere — at  half-mast  from  public  buildings,  State, 
county,  town  and  city ;  wrrapped  about  the  portals  of  our  homes, 
and  planted  upon  every  mound  beneath  which  a  soldier  sleeps.  Let 
the  people  assemble  in  church  and  cemetery,  and  with  music,  oratory 
and  song  pay  tribute  to  their  memory.  Let  affection's  grateful 
tears  embalm  anew 

"The  turf  that  wraps  their  clay," 

and  gentle,  tender  hands  spread  wide  the  floral  evidences  of  our 
love. 

Let  us  so  keep  this  day  that  the  surviving  comrades  of  our  dead 
may  know  we  do  not  forget ;  that  our  children  may  be  assured  of 
the  sincerity  of  our  devotion,  and  that  our  young  men  and  women 
may  be  reimpressod  with  the  value  of  free  institutions  and  the 
sacredness  of  obligations  by  them  about  to  be  assumed. 

Standing  at  the  chancel  of  memory's  holy  shrine,  let  us  renew 
the  covenant  made  with  Lincoln  at  Gettysburg,  "That  these  dead 
shall  not  have  died  in  vain — that  this  Nation,  under  God,  shall  have 
a  new  birth  of  freedom," — a  "new  birth"  more  glorious  and  abiding 
even  than  the  old. 


395 

That  the  day  be  a  Memorial  Day  in  spirit  and  in  truth,  I  urge 
that  all  the  people  refrain  from  frivolous  and  noisy  amusements, 
and  that  none  infract  the  law. 

Done  at  the  Capitol  in  Indianapolis,  and  given  under  my  hand 
and  the  Great  Seal  of  the  State,  this  16th  day  of  May,  in  the  year 
of  our  Lord,  nineteen  hundred  and  six,  in  the  year  of  the  Inde- 
pendence of  the  United  States  the  130th,  and  in  the  year  of  the  ad- 
mission of  the  State  of  Indiana  the  90th. 

J.  FRANK  HANLY, 

[SEAL,.]  Governor  of  Indiana. 

By  the  Governor : 

FRED  A.  SIMS, 

Secretary  of  State. 


MEMORIAL    DAY,    1907. 


UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation: 

Since  the  Civil  War  a  generation  has  been  born  and  reared  and 
is  now  nearing  the  zenith  of  its  power. 

This  generation  will  soon  govern  the  country — make  its  laws 
and  interpret  and  execute  them  and  administer  its  affairs. 

The  beneficiaries  of  one  hundred  and  thirty  years  of  unex- 
ampled sacrifices,  transcendent  services  and  exalted  devotion,  love 
of  country  and  of  freedom  and  thankfulness  to  those  who  founded 
and  to  those  who  preserved  the  government,  should  impel  us  to 
make  acknowledgment  of  our  obligation,  give  expression  to  our 
gratitude  and  renew  the  covenants  of  our  citizenship. 

Moved  by  this  thought,  in  compliment  to  the  living  soldiery  of 
the  Republic,  and  pursuant  to  custom  grown  sacred  as  the  love 
we  bear  the  martyred  dead,  I,  J.  Frank  Hanly,  Governor  the  State 
of  Indiana,  do  hereby  designate  and  set  apart  Thursday,  May  30, 
1907,  as  Memorial  Day,  and  proclaim  the  same  a  legal  holiday 
throughout  said  State. 

Universal  observation  of  the  day  is  recommended  and  urged. 
Public  offices  should  be  closed.  Business  should  be  suspended  and 


396 

toil    discontinued.      Frivolous    and    noisy    amusements    should    be 
avoided  and  the  law  respected. 

In  the  National  cemeteries  near  the  great  battlefields  of  the 
Southland  and  about  the  prison  at  Andersonville,  where  gaunt  and 
glwstlv  famine  stalked  and  disease  and  thirst  made  death  a  wel- 
come visitor,  there — over  the  graves  of  all,  even  of  the  unknown — 
the  forget-me-nots  are  in  bloom  today  in  annual  commemoration 
of  their  exalted  sacrifice.  And  there  each  recurring  Spring  above 
their  formless  dust  they  spread  their  fragrance  sweet  as  silence. 

These,  all  these,  gave  their  lives,  and  the  unknown  ones  gave  in 
addition  their  identity  forever,  that  "Government  of  the  people,  for 
the  people  and  by  the  people  might  not  perish  from  the  earth." 
We,  their  children,  can  not  forget  them.  We  can  not  forget  what 
they  did.  Nor  can  we  forget  why  they  did  it.  We  can  not  be 
less  mindful  than  the  flowers. 

Of  all  the  brave  and  gallant  hosts  who  have  marched  to  battle 
in  Freedom's  cause  on  this  continent  and  who  have  died  amid  its 
carnage  or  in  the  peace  of  the  intervening  years  there  remains  to 
us  nothing  visible — nothing  that  the  sense  of  sight  or  touch  can 
comprehend — save  narrow  graves  in  scattered  cemeteries.  Since 
these  are  all  we  have  let  us  seek  them  out  on  this  day  wheresoever 
they  may  be  and  leave  upon  them  some  tribute  of  our  love — a 
wreath,  a  flower,  a  flag.  Let  these  graves  be  to  us  as  so  many  holy 
shrines  at  whose  portals  our  own  lives  shall  be  consecrated.  Let  no 
idle  ceremony  there  be  heard  or  held.  Let  neither  music,  song  nor 
spoken  word  give  voice  or  tongue  to  aught  but  the  heart's  resolves. 
The  dead  may  not  hear ;  they  may  riot  know ;  it  may  be  that  they 
will  sleep  on  unconscious  alike  of  both  our  tribute  and  our  presence. 
But  we  shall  hear  and  we  shall  know,  and  our  children  shall  hear 
and  know,  and  we  and  they  shall  be  lifted  thereby  to  higher  citizen- 
ship and  our  feet  turned  into  holier  ways. 

Done  at  the  Capitol  in  Indianapolis,  and  given  under  my  hand 
and  the  Great  Seal  of  the  State,  this  18th  day  of  May,  in  the  year 
of  our  Lord,  nineteen  hundred  and  seven,  in  the  year  of  the  Inde- 
pendence of  the  United  States  the  131st,  and  in  the  year  of  the  ad- 
mission of  the  State  of  Indiana  the  91st. 

J.  FRANK  HANLY, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor : 

FRED  A.  SIMS, 

Secretary  of  State. 


397 
MEMORIAL    DAY,    1908. 


UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A   Proclamation : 

In  obedience  to  the  will  of  the  people  of  this  free  Commonwealth 
as  expressed  in  legal  enactment  and  by  long  established  precedent ; 
moved  by  gratitude  and  affection  and  impelled  by  reverential  mem- 
ories of  the  Nation's  soldier  dead,  I,  J.  Frank  Hanly,  Governor  of 
the  State  of  Indiana,  do  hereby  set  apart  and  proclaim  Saturday, 
May  30th,  1908,  a  Memorial  Day,  to  be  observed  in  their  honor, 
and  declare  the  same  to  be  a  lawful  holiday  throughout  the  bound- 
aries of  said  State. 

A  grateful  Nation  cannot  forget  its  defenders,  nor  the  lovers 
of  liberty  cease  to  remember  them  that  saved  the  temple  of  Freedom 
from  destruction. 

They  gathered  up,  each  for  himself,  "all  the  cherished  purposes 
of  life — its  aims  and  ambitions,  its  dearest  affections — and  flung 
all,  with  life  itself,  into  the  scale  of  battle."  They  died  in  de- 
fense of  the  rights  and  liberties  of  mankind  and  they  should  share 
for  all  time  in  the  glory  of  the  cause  for  which  they  died.  Their 
valor  immortalized  the  Nation,  their  sacrifice  ennobled  the  race. 
For  four  years  they  and  their  comrades,  from  Sumter  to  Appo- 

mattox,  became 

"The  pillar  of  the  people's  hope, 
The  center  of  the  world's  desire." 

Their  faith  was  flawless,  their  consecration  unselfish  and  entire, 
their  daring  heroic,  their  courage  sublime.  But  for  them  Liberty 
would  have  here  no  habitation,  freedom  no  temple.  Grateful  ob- 
servance of  this  day  is  both  our  duty  and  our  privilege.  Their 
graves  billow  every  battle-field,  and  make  shrines  of  many  places. 
Let  us  turn  with  tenderness  to  the  passionless  mounds  that  hold 
their  mortal  dust — in  cemetery,  churchyard,  lonely  lawn,  far  dis- 
tant grove,  and  national  field.  Let  none  be  forgotten  or  overlooked. 
Let  even  the  unknown  be  remembered.  Let  their  sepulchers,  how- 
ever humble  and  wherever  found,  be  to  us  so  many  baptismal  fonts 
at  which  to  renew  our  faith  in  the  cause  they  defended,  and  to  re- 
dedicate  ourselves  to  the  service  of  the  government  they  preserved. 


398 

Let  us  on  this  day  above  all  others  respect  the  law  and  obey 
its  mandates.  Let  us  not  desecrate  the  hour  with  frivolous  and 
noisy  amusements.  Let  the  ceremonies  held  be  the  expression  of 
the  heart's  sincere  affection.  Let  the  occasion  be  marked  with  song 
and  speech  and  flower  and  by  the  silence  which  alone  can  charac- 
terize the  feelings  of  the  soul  in  its  highest  hours — a  tribute  more 
eloquent  than  speech  can  ever  be. 

Done  at  the  Capitol  in  Indianapolis,  and  given  under  my  hand 
and  the  Great  Seal  of  the  State,  this  19th  day  of  May,  in  the  year 
of  our  Lord,  nineteenth  hundred  and  eight,  in  the  year  of  the  In- 
dependence of  the  United  States  the  one  hundred  and  thirty- 
second,  and  in  the  year  of  the  admission  of  the  State  of  Indiana  the 
ninety-second. 

J.  FRANK  HANLY, 

[SEAL,.]  Governor  of  Indiana. 

By  the  Governor : 

FRED  A.  SIMS, 

Secretary  of  State. 


399 

LABOR  DAY 


LABOR    DAY,    1905. 


UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A   Proclamation : 

By  virtue  of  the  authority  vested  in  me  by  law,  and  in  con- 
formity with  long  established  custom  and  formal  legislative  enact- 
ment, I,  J.  Frank  Hanly,  Governor  of  the  State  of  Indiana,  do 
hereby  designate  and  set  apart  Monday,  September  fourth,  one 
thousand  nine  hundred  and  five,  as  Labor  Day,  and  I  do  hereby  fur- 
ther proclaim  the  same  as  a  special  holiday  and  recommend  that  it 
be  observed  as  such,  not  only  by  those  who  toil,  but  by  men  and 
women  everywhere  throughout  the  State,  whatever  their  field  of 
labor  or  their  occupation. 

This  Nation,  with  all  it  represents  or  is,  is  labor's  contribution 
to  the  present  sum  of  human  peace  and  happiness.  Within  little 
more  than  a  hundred  years,  with  the  aid  of  her  twin  servants,  capi- 
tal and  science,  she  carved  it  out  of  the  depths  of  primeval  forests 
and  the  solitudes  of  pathless  prairies ;  bridged  its  streams,  revealed 
the  hidden  treasures  of  its  fields  and  mines,  builded  its  villages  and 
towns,  established  its  cities,  reared  within  its  borders  homes  in- 
numerable, and  bound  them  all  into  one  with  belts  of  steel  and  end- 
less threads  of  wire.  Through  the  divine  ministry  of  toil  the  full- 
ness of  the  land  is  ours.  We  live  in  favored  times.  The  elements 
of  the  soil,  of  the  air,  and  of  the  sky,  and  the  seasons  themselves 
have  conspired  with  labor  to  make  this  a  year  of  immeasurable 
plenty  throughout  the  Nation  and  especially  within  our  own  goodly 
Commonwealth. 

It  is  therefore  meet  and  proper  that  we  set  apart  this  day  to 
celebrate  labor's  triumphs  and  to  do  honor  to  her  children. 

Therefore,  let  the  flag — emblem  of  law  and  order,  and  of  the 
equality  of  our  citizenship — be  publicly  displayed.  Let  public  and 
private  business  be  suspended  as  far  as  may  be  consistent  with 
necessity,  and  especially  let  those,  so  far  as  practicable,  wrho  labor 
with  their  hands  be  released  from  the  performance  of  their  daily 


400 

tasks  in  order  that  they  may  have  one  day  free  from  toil  and  care. 
Let  the  spirit  of  the  occasion  be  such  as  becomes  a  glad  and  joyous 
celebration  of  the  mighty  force  that  has  made  us  great  both  as  a 
State  and  as  a  Nation,  and  upon  which  depends  the  prosperity  and 
happiness  of  our  posterity. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused 
to  be  affixed  the  Great  Seal  of  the  State  of  Indiana,  at  the  Capitol 
in  the  city  of  Indianapolis,  this  twenty-eighth  day  of  August,  in 
the  year  of  our  Lord,  one  thousand  nine  hundred  and  five,  of  the 
Independence  of  the  United  States  the  one  hundred  and  thirtieth, 
and  of  the  admission  of  the  State  of  Indiana  the  eighty-ninth. 

J.  FRANK  HANLY, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor: 

DANIEL  E.  STORMS, 
Secretary  of  State. 


LABOR    DAY,    1906. 


UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation: 

It  is  meet  and  fitting  that  a  people  who  believe  in  the  dignity 
and  sovereignty  of  labor,  in  its  wholesomeness,  and  in  the  glory  of 
its  opportunity,  should  pause  in  the  rush  of  affairs,  once  each  year, 
to  give  formal  expression  to  such  belief,  and  to  make  public  ac- 
knowledgment of  the  great  part  the  toilers  of  the  land  have  borne 
in  the  reclamation  of  a  continent  and  in  the  upbuilding  of  the  Na- 
tion. 

Therefore,  I,  J.  Frank  Hanly,  by  virtue  of  the  authority  vested 
in  me  as  Governor  of  the  State  of  Indiana,  do  hereby  designate  and 
set  apart  Monday,  September  3,  1906,  as  Labor  Day,  and  do  also 
further  appoint  and  proclaim  the  same  as  a  holiday  within  the 
State  of  Indiana,  and  do  recommend  that  it  be  observed  and  cele- 
brated as  such  by  all  citizens  of  the  State  wherever  they  may  be 
and  whatever  their  form  of  toil  or  occupation. 

Let  the  flag — emblem  of  liberty,  equality  and  opportunity- 
be  everywhere  displayed.  Let  all  public  and  private  business  be 


401 

suspended,  so  far  as  necessity  may  permit,  that  all  may  join  in  the 
celebration  of  labor's  achievements  and  of  the  honorable  estate  it 
has  attained  in  this  free  land. 

In  Testimony  Whereof,  I  have  hereunto  set  may  hand  and 
caused  to  be  affixed  the  Great  Seal  of  the  State  of  Indiana,  at  the 
Capitol  in  the  City  of  Indianapolis,  this  twenty-seventh  day  of 
August,  in  the  year  of  our  Lord,  nineteen  hundred  and  six,  in  the 
year  of  the  Independence  of  the  United  States  the  131st,  and  in 
the  year  of  the  admission  of  the  State  of  Indiana  the  91st. 

J.  FRANK  HANLY, 

[SEAT,.]  Governor  of  Indiana. 

By  the  Governor : 

FRED  A.  SIMS, 

Secretary  of  State. 


LABOR    DAY,    1907. 


UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation : 

By  virtue  of  the  authority  vested  in  me  as  Governor  of  the  state 
of  Indiana,  I,  J.  Frank  Hanly,  do  hereby  designate,  set  apart  and 
proclaim  Monday,  September  2,  1907,  as  Labor  Day,  and  I  do  here- 
by further  declare  the  same  a  legal  holiday  and  recommend  its  ob- 
servance as  such  by  all  the  people  of  the  Commonwealth. 

It  is  meet  and  proper  that  this  day  should  be  set  apart  by  the 
Executive  and  observed  by  the  people.  Custom  and  law  contem- 
plate its  recognition,  and  duty  and  privilege  prompt  its  observ- 
ance. Labor  is  the  bedrock  of  our  greatness  as  a  State  and  the 
foundation  of  our  civilization.  Willingly  undertaken  and  rightly 
understood,  it  is  a  boon  and  not  a  burden ;  a  blessing  and  not  a 
curse.  It  ennobles  and  exalts  him  who  performs  it,  gladdens  the 
heart,  stirs  the  soul  with  the  exaltation  of  achievement,  and  makes 
consecrated  citizenship  a  possibility.  He  who  has  never  known 
the  joy  of  creative  toil  is  indeed  unfortunate.  The  man  who  toils, 
without  bitterness,  to  build  a  home  for  those  dependent  upon  him, 
where  family  altars  may  be  erected  and  into  which  the  love  of 
wife  and  child  may  come  to  sweeten  and  inspire  his  life,  is  an  asset 
[26—19891] 


402 

of  incomparable  value  to  any  people,  and  especially  so  to  a  free, 
self -governing  people.  His  well-being  and  happiness  make  for  the 
advancement  and  security  of  all  we  most  love,  and  should  consti- 
tute our  first  concern. 

That  all  should  share  in  the  annual  celebration  of  labor's  worth 
and  accomplishments  is,  therefore,  but  the  recognition  of  a  high 
and  an  admitted  obligation  and  the  exercise  of  a  grateful  privilege. 
In  this  spirit  then  let  the  day  be  celebrated.  Let  all  public  offices, 
state,  county  and  municipal,  be  closed  and  all  labor  be  suspended 
wherever  possible.  Let  tasks  and  burdens  be  laid  aside  and  the  day 
be  given  over  to  rejoicing,  to  rest  and  to  thoughtful,  sane  consid- 
eration of  how  the  toiler's  present  high  estate  may  be  yet  further 
advanced. 

The  law  forbids  the  sale  on  this  day  of  intoxicating  liquors  to 
be  used  as  a  beverage.  It  is  important  that  its  mandate  should  be 
obeyed.  First,  because  it  is  the  law's  word ;  second,  that  the  cere- 
monies of  the  day  may  not  be  marred,  but  may  be  suited  to  the 
presence  of  women  and  children. 

Done  at  the  Capitol  in  Indianapolis,  and  given  under  my  hand 
and  the  Great  Seal  of  the  State,  this  24th  day  of  August,  in  the 
year  of  our  Lord,  nineteen  hundred  and  seven,  in  the  year  of  the 
Independence  of  the  United  States  the  131st,  and  in  the  year  of 
the  admission  of  the  State  of  Indiana  the  91st. 

J.  FRANK  MANLY, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor: 

FRED  A.  SIMS, 

Secretary  of  State. 


LABOR    DAY,    1908. 


UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A   Proclamation : 

In  recognition  of  the  sovereignty  of  Toil  and  of  Labor's  incom- 
parable contribution  to  the  welfare  and  happiness  of  the  people 
of  this  Commonwealth,  I,  J.  Frank  Hanly,  by  virtue  of  the  au- 
thority vested  in  me  as  Governor  of  the  State  of  Indiana,  do  hereby 


403 

set  apart  and  proclaim  Monday,  September  7,  1908,  as  Labor  Day, 
and  do  hereby  constitute  and  declare  the  same  a  legal  holiday 
throughout  the  confines  of  said  State  and  recommend  its  fitting  ob- 
servance by  all  citizens  everywhere. 

Labor  is  the  one  source  of  wealth.  The  genius  both  of  pro- 
duction and  of  commerce  is  in  it.  Through  it  the  mastery  of  Na- 
ture's forces  is  attained,  and  the  utilization  of  her  resources  ac- 
quired. Without  it  science  and  invention  could  achieve  no  tri- 
umphs. It  is  the  foundation  of  society ;  the  inspiration  of  gov- 
ernment ;  the  bulwark  of  civic  order.  It  is  more  than  the  law  of 
life.  It  is  life  itself.  It  is  God-appointed. 

Let  all  public  offices  be  closed  and  all  private  business  wherever 
possible  be  suspended.  Let  us  keep  the  day  here  set  apart  in  ap- 
preciation of  Labor's  worth,  and  in  commemoration  of  its  victories. 

The  women  and  the  children  of  the  Commonwealth  are  of  right 
entitled  to  share  in  the  ceremonies  and  recreations  of  the  day  with- 
out disturbance  by  brawl  or  carousal.  To  that  end,  and  to  the  end 
that  the  peace  may  not  be  broken1,  and  that  order  may  be  main- 
tained, the  sale  of  intoxicating  liquors  is  inhibited  by  law  on  this 
day.  Civic  duty  demands  respect  for  and  obedience  to  this  man- 
date of  the  law  by  every  citizen — its  enforcement  by  every  executive 
officer.  Let  none  forget.  Let  all  remember.  In  such  observance 
and  in  such  obedience  alone  can  the  cause  in  whose  name  and  for 
whose  benefit  the  day  is  set  apart  find  fitting  recognition. 

Done  at  the  Capitol  in  Indianapolis,  and  given  under  my  hand 
and  the  Great  Seal  of  the  State,  this  18th  day  of  August,  in  the 
year  of  our  Lord,  nineteen  hundred  and  eight,  in  the  year  of  the 
Independence  of  the  United  States  the  one  hundred  and  thirty- 
third,  and  in  the  year  of  the  admission  of  the  State  of  Indiana  the 
ninety-second. 

J.  FRANK  HANLY, 

[SEAT,.]  Governor  of  Indiana. 

By  the  Governor : 

FRED  A.  SIMS, 

Secretary  of  State. 


404 


THANKSGIVING  DAY 


THANKSGIVING   DAY,    1905. 

• 

UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation: 

In  accordance  with  the  proclamation  and  recommendation  of 
the  President  of  the  United  States,  duly  made  and  published,  ap- 
pointing a  day  of  national  thanksgiving  to  be  observed  by  the 
people  of  the  Nation ;  in  conformity  with  sacred  tradition  and  with 
hallowed,  revered  and  long  established  custom ;  in  continuance  of 
a  practice  both  beautiful  and  wise,  and  in  acknowledgment  of  high 
and  holy  obligation  to  the  Giver  of  all  Good,  I,  J.  Frank  Hanly, 
Governor  of  the  State  of  Indiana,  do  hereby  designate  and  set 
apart  Thursday,  the  thirtieth  day  of  this  November,  as  Thanks- 
giving Day,  to  be  observed  by  the  people  of  the  State  of  Indiana. 

From  the  day  of  its  founding  to  the  present  hour,  this  Nation 
lias  been  led  by  the  providences  and  the  wisdom  of  Almighty  God. 
For  one  hundred  and  thirty  years  it  has  been  protected  by  His  care 
and  followed  by  His  mercies.  Periods  of  adversity  have  sometimes 
fallen  upon  us,  but  these  have  been  shortened,  their  vicissitudes  min- 
imized and  their  rigors  softened  by  His  gracious  favor  and  infinite 
tenderness.  More  largely  than  in  any  other  land,  our  way  has 
fallen  "beside  the  still  waters"  and  through  "green  pastures."  We 
have  sorrowed,  and  He  has  comforted  us.  We  have  sinned,  and  He 
has  forgiven  us.  Our  annals  are  replete  with  His  goodness  and  His 
mercy. 

The  closing  days  of  a  most  memorable  year  are  quickly  passing. 
A  few  weeks  and  they  will  have  gone  into  history.  It  is  therefore 
meet  that  we  pause  ere  they  are  gone  to  consider  the  richness  of 
the  largess  they  have  brought  to  us.  Our  harvests  have  been  un- 
usually abundant.  Our  granaries  are  full.  The  fruits  of  success- 
ful and  peaceful  toil  are  about  us.  Factory,  shop,  field  and  mine 
liavr  contributed  shares  rich  and  full.  Trade  and  commerce  have 
registered  increasing  volume  and  augmented  profit.  Our  material 
prosperity  is  without  parallel.  The  social,  intellectual  and  moral 


405 

life  of  the  Nation  has  been  strengthened  and  enriched.  The  pub- 
lic conscience  lias  been  stirred  and  quickened.  Civic  conditions  have 
improved.  Respect  for  the  law  has  daily  deepened  in  our  thoughts 
and  hearts.  Citizenship  has  been  exalted,  and  the  land  kept  as 
our  fathers  left  it — the  habitation  of  liberty. 

Believing  that  the  spirit  of  thankfulness  and  of  gratitude  is 
already  present  in  every  heart,  and  that  it  awaits  only  an  oppor- 
tunity for  expression,  I  recommend  that  all  usual  avocations  be 
suspended  on  this  day,  that  pause.be  made  in  our  secular  pursuits, 
that  we  assemble  in  our  several  places  of  worship  and  there  make 
due  and  grateful  acknowledgment  of  the  beneficence  of  our  Heav- 
enly Father  to  us  as  a  people,  whether  of  State  or  of  Nation,  and 
that  with  contrite  hearts  and  penitential  souls  we  seek  forgiveness 
at-  His  chancels  for  past  faults  and  follies  and  make  humble  and 
sincere  supplication  for  future  guidance  and  deliverance. 

Let  the  arrogance  of  prosperity  give  place  to  the  humility  of 
dependence,  and  the  meanness  of  self  to  the  altruism  of  the  gospel 
of  the  Christ.  Let  this  be  a  day  of  prayer,  of  praise  and  of  thanks- 
giving. Let  it  be  characterized  by  a  revival  of  love  of  country  and 
of  fraternal  affection,  by  the  reunion  of  families  and  of  kindred, 
and  by  the  renewal  of  confidence  in  one  another.  Let  it  be  marked 
by  ready  benevolence  to  the  homeless,  by  kindly  and  simple  charity 
to  the  suffering  and  needy,  and  by  Christian  ministry  to  the  sorrow- 
ful. Let  us  especially  remember  with  gracious  tenderness  the  lit- 
tle ones  whose  lives  are  pinched  by  poverty  by  them  unearned,  and 
saddened  by  neglect  by  them  unmerited,  that  they  too  may  look  up 
and  be  glad. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused 
to  be  affixed  the  Great  Seal  of  the  State  of  Indiana,  at  the  Capitol 
in  the  City  of  Indianapolis,  this  fifteenth  day  of  November,  in  the 
year  of  our  Lord,  nineteen  hundred  and  five,  in  the  year  of  the  In- 
dependence of  the  United  States  the  130th,  and  in  the  year  of  the 
admission  of  the  State  of  Indiana  the  89th. 

J.  FRANK  HANLY, 

Governor  of  Indiana. 
By  the  Governor : 

DANIEL  E.   STORMS, 

Secretary  of  State. 


406 
THANKSGIVING    DAY,    1906. 

I'NITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation : 

Presidential  proclamation,  duly  made  and  published ;  tradition, 
old  and  hallowed  ;  custom,  revered  and  long-established ;  gratitude, 
sincere  and  deep ;  and  obligation,  high  and  holy,  impel  me  on  be- 
half and  in  the  name  of  the  people  of  this  goodly  Commonwealth, 
to  appoint  and  designate  a  day  for  prayer,  for  praise  and  for 
thanksgiving  to  Almighty  God,  in  recognition  of  the  protecting 
care  and  the  manifold  mercies  which  He  has  vouchsafed  to  us  as 
a  people,  in  both  State  and  Nation. 

The  annals  of  the  passing  year  are  replete  with  His  goodness 
and  with  His  gracious  favor.  We  can  not  turn  their  pages  and 
remain  insensible  to  the  wisdom  of  His  ways  nor  indifferent  to  the 
tenderness  of  His  love.  We  have  prospered  in  material  things  be- 
yond all  precedent.  We  have  written  a  story  of  accumulated  gain 
without  purrallel  in  the  life  of  any  people.  The  fatness  of  Earth's 
most  favored  land  is  ours.  It  has  filled  our  needs  and  made  us  rich 
beyond  compare.  The  fruits  of  successful  and  peaceful  toil,  of 
field  and  harvest,  and  the  products  of  shop,  of  factory  and  of 
mine,  of  commerce  and  of  the  sea  are  about  us  everywhere.  Gran- 
ary, bin  and  storeroom  are  big  with  plenty. 

These  are  good  to  possess  and  to  have,  and  for  them  we  ought 
to  be,  and  are,  profoundly  grateful.  But  there  is  more  than  these 
to  stir  our  gratitude  and  to  inspire  our  praise :  Unequaled  wealth 
lias  not  despoiled  us  of  moral  worth,  nor  the  arrogance  of  riches 
displaced  the  humility  of  dependence  so  essential  to  the  soul-life  of 
a  free  people.  The  altruism  of  the  Savior's  Gospel  rises  in  our 
hearts  triumphant  over  the  passions  and  meanness  of  self.  We  are 
still  God's  children.  He  is  still  "Our  Father."  Belief  in  Him,  and 
sense  of  obligation  to  our  fellows,  and  a  purpose  to  honor  Him 
through  service  to  them  have  enabled  us  in  some  measure  to  prove 
our  faith  by  our  deeds.  We  have  wrought  in  fear  and  in  trem- 
bling, but  we  have  wrought,  and  with  quickened  conscience.  New 
ideals  have  been  born,  and  new  conceptions  of  civic  duty — ideals 
-••nd  conceptions  which  promise  much  for  future  progress.  Better 


407 

civic  conditions  have  not  only  been  aspired  to,  but  have  been  ob- 
tained. And  as  was  said  last  year,  it  may  still  be  said:  "Respect 
for  the  law  has  daily  deepened  in  our  hearts.  Citizenship  has  been 
exalted  and  the  land  kept  as  our  fathers  left  it — the  habitation  of 
liberty." 

Adversities  have  befallen  and  vicissitudes  come  upon  us,  but 
they  have  not  destroyed  nor  overcome  us.  We  have  risen  from 
among  them  disciplined  and  chastened  and  purer  and  stronger 
than  before.  Sufficient  unto  our  needs  have  been  His  grace  and 
His  guidance.  Our  burdens  have  been  heavy,  but  we  have  been 
given  strength  to  bear  them.  Our  grief  has  been  sore  and  pro- 
found and  we  have  sometimes  been  distraught,  but  in  Him  we  have 
found  consolation  and  comfort.  Our  sins  have  been  many,  but 
as  often  as  we  have  come  to  Him  with  contrite  hearts  and  peni- 
tential souls,  His  forgiveness  has  been  full  and  free.  These  things 
claim  our  profoundest  appreciation  and  sincerest  acknowledgment. 

Therefore,  I,  J.  Frank  Hanly,  Governor  of  the  State  of  Indi- 
ana, do  hereby  set  apart  and  proclaim  Thursday,  the  twenty-ninth 
day  of  this  November,  as  Thanksgiving  Day,  to  be  observed  by 
the  people  throughout  the  State. 

Let  all  usual  avocations  and  secular  pursuits  be  suspended.  Let 
us  repair  to  our  several  and  accustomed  places  of  worship  and  fill 
the  day  with  praise,  with  song,  with  prayer  and  with  thanksgiving, 
and  with  kindly  word  and  generous  deed  rekindle  the  memories  of 
country  and  of  home.  Let  us  renew  the  ties  of  family  and  of 
kindred  and  welcome  to  our  firesides  the  absent  ones  returned,  and 
there  give  them  new  assurance  of  the  love  we  bear  them.  Let  us 
remember  the  homeless  and  the  needy — those  who  are  in  want — and 
fail  not  in  ministry  to  the  broken-hearted. 

Let  us  be  especially  thoughtful  of  childhood.  Some  of  the  little 
ones  among  us  will  be  hungry — for  these  let  us  find  food;  some 
will  be  cold — for  these  let  us  bring  clothing;  others  will  be  sad  of 
heart  from  unmerited  neglect — for  these  let  us  have  a  gracious 
tenderness  and  a  touch  of  sympathy  that  will  satisfy  heart-hunger, 
recall  a  smile  to  thin,  wan  lips  and  bring  the  laughter  back  to 
careworn  eyes.  Let  us  do  this  in  remembrance  of  Him,  and  in 
the  doing  of  it  we  and  our  posterity  shall  be  blest. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused 
to  be  affixed  the  Great  Seal  of  the  State  of  Indiana,  at  the  Capitol 
in  the  city  of  Indianapolis,  this  twelfth  day  of  November,  in  the 
year  of  our  Lord,  nineteen  hundred  and  six,  in  the  year  of  the 


408 

Independence  of  the  United  States  the  131st,  and  in  the  year  of 
the  admission  of  the  State  of  Indiana  the  90th. 

J.  FRANK  HANLY, 

Governor  of  Indiana. 
By  the  Governor : 

FRED  A.  SIMS, 

Secretary  of  State. 


THANKSGIVING    DAY,    1907. 


UNITED  STATES  OF  AMERICA,  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation: 

The  absence  of  the  growth  and  bloom  of  spring;  the  fading 
glow  of  summer;  the  ripened  fields  of  corn,  wide-spreading  and 
harvest-waiting;  the  departing  glory  of  forest  and  of  woodland; 
the  veiled  skies  of  autumn  and  the  chill  of  lengthening  nights  all 
remind  us  of  the  approaching  end  of  another  year  and  recall  to 
our  minds  a  custom  old  as  the  Commonwealth  in  which  we  live,  and 
sacred  as  the  memory  of  the  men  who  founded  it. 

In  deference  to  this  custom,  in  conformity  with  the  proclama- 
tion of  the  President  of  the  United  States,  and  in  humble  recogni- 
tion and  grateful  acknowledgment  of  the  goodness  and  mercy  of 
Almighty  God,  I,  J.  Frank  Hardy,  Governor  of  the  State  of  Indi- 
ana, do  hereby  desginate,  set  apart  and  proclaim  Thursday,  the 
twenty-eighth  day  of  this  November,  as  a  Day  of  Praise  and 
Thanksgiving,  and  as  a  legal  holiday  throughout  said  State,  and 
do  hereby  recommend  its  observance  as  such  by  all  the  inhabitants 
thereof. 

The  sons  and  daughters  of  Indiana  have  much  today  to  stir 
their  gratitude  and  to  impel  its  public  acknowledgment.  The 
plentiful  goodness  of  our  Heavenly  Father  is  about  us  everywhere, 
and  the  evidences  of  His  gracious  tenderness  are  written  in  a 
thousand  indelible  forms  throughout  the  annals  of  the  passing  year. 

Seed-time  and  harvest  have  again  been  ours.  The  earth  has 
been  lavish  in  the  production  of  all  things  essential  to  our  suste- 
nance. The  bounties  of  Nature— prodigal  in  number  and  gener- 


409 

ous  in  value,  enough  and  to  spare — are  saved  and  stored.  Material 
prosperity — industrial  and  commercial — has  reached  and  gone  be- 
yond the  tide  of  other  years.  Sickness  and  disease  have  fallen  upon 
us  only  in  normal  measure,  and  pestilence  and  scourge  not  at  all. 
Affliction  and  destitution  consequent  upon  our  own  weaknesses  and 
follies  have  been  minimized.  Our  citizenship  is  intelligent,  liberty- 
loving,  God-fearing  and  law-abiding;  our  people,  strong,  con- 
stant and  resolute.  The  splendor  of  our  institutions  remains  un- 
dimmed.  The  heritage  of  the  past  is  still  secure.  The  advantages 
and  duties  of  the  present  are  more  generally  and  more  clearly  seen 
and  understood,  and  the  possibilities  of  the  future  more  widely  and 
sincerely  believed  in  than  in  recent  days.  The  public  conscience 
has  continued  to  be,  and  still  is,  stirred  and  quickened.  Civic  con- 
cepts are  higher  and  clearer.  Moral  worth  is  more  keenly  appre- 
ciated, and  wrongdoing — public  and  private — and  social  weak- 
nesses of  every  kind  more  deeply  deplored. 

And  yet,  with  all  this  true,  we  have  sinned  and  do  still  sin. 
Our  faults  are  still  grievous,  our  follies  still  many — so  grievous 
and  so  many  indeed  as  to  humble  us  and  bring  us  to  God's  chancels 
in  repentance  and  in  supplication  for  forgiveness. 

Let  us  on  this  day  pause  in  our  pursuit  of  wealth  and  in  our 
struggle  for  gain  and  meet  in  devout  assemblages  in  our  accus- 
tomed and  several  places  of  worship  and  there  renew  the  faith  of 
our  fathers,  and  in  humility  and  in  gratitude  unite  in  meditation 
and  in  prayer,  and  join  in  services  of  song,  of  praise  and  of  thanks- 
giving. Let  us  consecrate  ourselves  anew  and  rededicate  our  lives 
to  the  practice  of  the  holy  teachings  of  the  Christ,  to  obedience 
to  the  laws  of  our  country  and  to  the  defense  of  its  institutions. 

Let  the  day  be  characterized  by  deeds  of  charity  and  of  kind- 
ness, to  the  end  that  he  who  has,  shall  share  with  him  who  has  not. 
In  glad  gatherings  around  domestic  altars  and  about  family  fire- 
sides, let  us  renew  past  friendships  and  sweeten  and  strengthen  the 
ties  of  kindred,  of  home  and  of  family.  Let  passion  be  stilled.  Let 
malice,  feuds  and  hatred  be  forgotten,  the  memory  of  wrongs  be 
blotted  out,  and  forgiveness  be  in  every  heart  and  upon  every  lip. 
Let  us  become  during  this  day  one  people  without  differences  of 
sect  or  creed  or  party,  and  amid  it  all  let  us  remember  the  children 
of  village,  of  countryside  and  of  city  with  gentle  word  and  kindly 
deed,  and  by  acknowledgment  of  our  dependence  upon  the  Great 
Father's  love  and  guidance  teach  them  the  comeliness  of  humility, 
flic  sublimity  of  Chris! Jan  faith. 

It  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused 


410 

to  be  affixed  the  Great  Seal  of  the  State  of  Indiana,  at  the  Capitol 
in  the  city  of  Indianapolis,  this  eleventh  day  of  November,  in  the 
year  of  our  Lord,  nineteen  hundred  and  seven,  in  the  year  of  the 
Independence  of  the  United  States  the  lS2d,  and  in  the  year  of  the 
admission  of  the  State  of  Indiana  the  91st. 

J.  FRANK  HANIY, 

[SEAL,.!  Governor  of  Indiana. 

By  the  Governor: 

FRED  A.  SIMS, 

Secretary  of  State. 


THANKSGIVING    DAY,    1908. 


UNITED  STATES  OF  AMERICA',  STATE  OF  INDIANA, 
EXECUTIVE  DEPARTMENT. 

A  Proclamation: 

On  Thursday,  the  26th  day  of  November,  1908,  a  day  desig- 
nated and  set  apart  by  the  President  of  the  United  States  for  that 
purpose,  the  people  of  this  land,  stirred  by  high  impulse  and  united 
by  common  intent,  will  pause  in  the  stress  and  hurry  of  their  busy, 
complex  life,  turn  aside  from  the  paths  of  trade  and  traffic,  gather 
around  family  altars  and  about  public  chancels,  and  there  make 
grateful  and  sincere  acknowledgment  of  the  tender  mercies  and 
the  unfailing  care  of  the  Infinite  Father. 

Believing  that  the  people  of  the  State  of  Indiana  desire  to  share 
in  the  observance  of  the  day,  in  its  ceremonies,  in  its  reunions,  its 
renewal  of  family  ties,  its  joys  and  its  benefits,  I,  J.  Frank  Hanly, 
as  Governor  of  the  Commonwealth,  do  also  designate  and  set  said 
day  apart  as  a  day  of  Praise,  of  Prayer  and  of  Thanksgiving,  and 
do  hereby  declare  it  to  be  a  legal  holiday  throughout  said  State. 

The  year  now  closing  has  been  crowned  with  goodness.  Ma- 
terial possessions  have  increased.  Riches  have  multiplied.  Seed- 
time and  harvest  have  been  ours.  "The  pastures  are  clothed  with 
flocks  and  the  valleys  are  covered  over  with  corn."  "The  earth  is 
full  of  the  goodness  of  the  Lord."  He  has  shown  us  His  ways. 
He  has  led  us  into  the  knowledge  of  His  truth,  and  has  made  the 
light  of  His  countenance  to  shine  upon  us.  He  has  saved  us  and 


411 

blessed  our  inheritance  and  has  taught  us  the  value  of  integrity 
and  uprightness. 

We  have  not  always  understood.  Our  ways  have  not  always 
been  His  ways.  But  we  are  finite  and  He  is  infinite.  We  see  but 
dimly,  are  sometimes  impatient  and  often  mistake  both  time  and 
place.  But  He  sees  clearly,  is  never  in  a  hurry  and  His  purposes 
do  not  fail.  His  "counsels  standeth  forever,"  His  "thoughts  to 
all  generations."  Time  and  place  are  always  His. 

Therefore,  let  us  publish  His  mercies  "with  the  voice  of  thanks- 
giving and  tell  of  His  wondrous  works."  With  "broken  and  con- 
trite hearts"  let  us  confess  our  sins.  Let  us  pray  that  our  hearts 
may  not  henceforth  turn  back,  nor  our  steps  depart  from  the  paths 
He  has  set  for  them.  Let  us  trust  Him  even  as  our  fathers  trusted 
Him.  Let  us  "depart  from  evil  and  do  good." 

Done  at  the  Capitol  in  Indianapolis,  and  given  under  my  hand 
and  the  Great  Seal  of  the  State,  this  13th  day  of  November,  in 
the  year  of  our  Lord,  nineteen  hundred  and  eight,  in  the  year  of 
the  Independence  of  the  United  States  the  133d,  and  in  the  year 
of  the  admission  of  the  State  of  Indiana  the  92d. 

J.  FRANK  HANLY, 

[SEAL,.]  Governor  of  Indiana. 

By  the  Governor: 

FRED  A.  SIMS, 

Secretary  of  State. 


412 


Declaring  the  Acts  of  the  General  Assembly 
to  be  in  Force  and  Effect 


DECLARING  THE  ACTS  OF  THE  SIXTY-FOURTH  GEN 
ERAL  ASSEMBLY  TO  BE  IN  FORCE  AND  EFFECT. 


A  Proclamation 

By  the  Governor  declaring  the  acts  of  the  Sixty-fourth  General 
Assembly  of  the  State  of  Indiana  to  be  in  force  and  effect  from 
and  after  the  hour  of  two  o'clock  and  thirty  minutes,  p.  m.,  of  the 
fifteenth  day  of  April,  1905. 

WHEREAS,  The  clerks  of  the  several  circuit  courts  in  the  State 
of  Indiana  have  transmitted  to  the  Secretary  of  State  their  respect- 
ive certificates,  stating  the  time  when  the  acts  of  the  Sixty-fourth 
General  Assembly  of  said  State,  passed  at  the  regular  session 
thereof,  were  received ;  and, 

WHEREAS,  By  the  aforesaid  certificates,  it  appears  that  the 
final  distribution  and  receipt  of  such  acts  took  place  on  the  fifteenth 
day  of  April,  1905,  at  the  hour  of  2 :30  o'clock  p.  m.,  in  the  office 
of  the  clerk  of  Madison  County,  in  said  State ;  and, 

WHEREAS,  A  certificate  of  said  facts  of  distribution  and  re- 
receipt  of  said  acts  was  filed  in  the  Executive  Office  of  the  State 
of  Indiana  at  the  hour  of  four  o'clock  p.  m.  of  said  fifteenth  day 
of  April,  1905,  by  the  Honorable  the  Secretary  of  State  of  said 
State ;  now, 

Therefore,  I,  J.  Frank  Hanly,  Governor  of  the  State  of  Indi- 
ana, in  accordance  with  said  facts  as  set  forth  in  said  receipts  of 
said  several  clerks  and  in  said  certificate  of  the  said  the  Secretary 
of  State,  and  in  conformity  with  the  provisions  of  the  Constitu- 
tion and  the  requirements  of  the  statute  in  such  cases  made  and 
provided,  do  hereby  make  proclamation  announcing  the  above  date 
and  time,  to  wit : 

The  15th  day  of  April,  1905,  at  the  hour  of  2 :30  o'clock  p.  m. 
as  the  date  at  which  the  latest  receipt  and  distribution  of  said  acts 
took  place  with  said  several  clerks  of  said  circuit  courts,  and  de- 
claring said  distribution  of  said  acts  to  have  been  completed  at 


413 

said  hour  of^said  day,  and  proclaiming  all  such  laws  published  and 
circulated  in  the  several  counties  of  the  State  by  proper  authority, 
to  be  now  in  full  force  and  effect. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused 
to  be  affixed  the  Great  Seal  of  the  State  of  Indiana,  at  the  Capitol 
in  the  city  of  Indianapolis,  this  fifteenth  day  of  April,  in  the  year 
of  our  Lord,  nineteen  hundred  and  five,  of  the  State  the  89th,  and 
of  the  United  States  the  129th. 

J.  FRANK  HANLY, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor: 

DANIEL  E.  STORMS, 
Secretary  of  State. 


DECLARING  THE  ACTS  OF  THE   SIXTY-FIFTH  GEN- 
ERAL ASSEMBLY  TO  BE  IN  FORCE  AND  EFFECT. 


A  Proclamation 

By  the  Governor  declaring  the  acts  of  the  Sixty-fifth  General  As- 
sembly of  the  State  of  Indiana  to  be  in  force  and  effect  from  and 
after  the  hour  of  twelve  o'clock  noon  of  the  10th  day  of  April, 
A.  D.  1907. 

WHEREAS,  The  clerks  of  the  several  circuit  courts  in  the  State 
of  Indiana,  have  transmitted  to  the  Secretary  of  State  their  re- 
spective certificates,  stating  the  time  when  the  acts  of  the  Sixty- 
fifth  General  Assembly  of  said  State,  passed  at  the  regular  session 
thereof,  were  received ;  and 

WHEREAS,  By  the  aforesaid  certificates,  it  appears  that  the 
final  distribution  and  receipt  of  such  acts  took  place  on  the  9th 
day  of  April,  1907,  at  the  hour  of  8:30  o'clock  a.  m.,  in  the  office 
of  the  clerk  of  Madison  County  in  said  State ;  and 

WHEREAS,  A  certificate  of  said  facts  of  distribution  and  re- 
ceipt of  said  acts  was  filed  in  the  Executive  Office  of  the  State  of 
Indiana  at  the  hour  of  10  o'clock  of  said  9th  day  of  April,  1907, 
by  the  Honorable,  the  Secretary  of  State  of  said  State ;  now, 

Therefore,  I,  J.  Frank  Hanly,  Governor  of  the  State  of  Indi- 
ana, in  accordance  with  said  facts  as  set  forth  in  said  receipts  of 
said  several  clerks  and  in  said  certificate  of  the  said  the  Secretary 


414 

of  State,  and  in  conformity  with  the  provisions  of  the  Constitution 
and  the  requirements  of  the  statute  in  such  cases  made  and  pro- 
vided, do  hereby  make  proclamation  announcing  the  above  date 
and  time,  to  wit : 

The  9th  day  of  April,  1907,  at  the  hour  of  8  :30  o'clock  a.  m. 
as  the  date  at  which  the  latest  receipt  and  distribution  of  said  acts 
took  place  with  said  several  clerks  of  said  circuit  courts,  and  de- 
claring said  distribution  of  said  acts  to  have  been  completed  at  said 
hour  of  said  day,  and  proclaiming  all  such  laws  published  and  cir- 
culated in  the  several  counties  of  the  State  by  proper  authority 
to  be  in  full  force  and  effect  from  and  after  the  hour  of  twelve 
o'clock,  noon,  the  10th  day  of  April,  1907. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused 
to  be  affixed  the  Great  Seal  of  the  State,  at  the  Capitol  in  the  city 
of  Indianapolis,  this  9th  day  of  April,  in  the  year  of  our  Lord, 
1907,  in  the  year  of  the  Independence  of  the  United  States  the 
131st,  and  in  the  year  of  the  admission  of  the  State  of  Indiana  the 
91st. 

J.  FRANK  HANLY, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor: 

FRED  A.  SIMS, 

Secretary  of  State. 


DECLARING  THE  ACTS  OF  THE  SPECIAL  SESSION  OF 

THE  SIXTY-FIFTH  GENERAL  ASSEMBLY 

TO  BE  IN  FORCE  AND  EFFECT. 


A  Proclamation 

By  the  Governor  of  the  State  of  Indiana  declaring  the  acts  of  the 
Sixty-fifth  General  Assembly  of  the  State  of  Indiana,  enacted  at 
the  Special  Session  thereof,  convened  on  the  18th  day  of  Septem- 
ber, A.  D.  1908,  to  be  in  force  and  effect  from  and  after  the  hour 
of  10 :45  o'clock  a.  m.,  of  the  20th  day  of  November,  A.  D.  1908. 

WHEREAS,  The  Clerks  of  the  several  circuit  courts  in  the  State 
of  Indiana  have  transmitted  to  the  Secretary  of  State  their  respect- 
ive certificates,  stating  the  time  when  the  acts  of  the  Sixty-fifth 
General  Assembly  of  the  State  of  Indiana,  enacted  at  the  Special 


415 

Session  thereof,  convened  on  the  18th  day  of  September,  A.  D. 
1908,  were  received;   and, 

WHEREAS,  By  the  aforesaid  certificates  it  appears  that  the 
final  distribution  and  the  receipt  of  such  acts  took  place  on  the 
20th  day  of  November,  A.  D.  1908,  at  the  hour  of  10:45  o'clock 
a.  m.,  in  the  office  of  the  clerk  of  the  Circuit  Court  of  Wells 
County,  in  said  State ;  and, 

WHEREAS,  Certificate  of  said  facts  of  distribution  and  receipt 
of  said  acts  was  filed  in  the  Executive  Office  of  the  State  of  Indiana 
at  the  hour  of  2:00  o'clock  p.  m.,  of  the  23d  day  of  November, 
A.  D.  1908,  by  the  Honorable  the  Secretary  of  State  for  said 
State ;  now, 

Therefore,  I,  J.  Frank  Hanly,  Governor  of  the  State  of  Indi- 
ana, in  accordance  with  said  facts  as  set  forth  in  said  receipts  of 
said  several  clerks  and  in  said  certificate  of  said  Secretary  of  State, 
and  in  conformity  with  the  provisions  of  the  Constitution  and  the 
requirements  of  the  statutes  in  such  case  made  and  provided,  do 
now  hereby  make  proclamation  announcing  the  above  date  and 
time,  to  wit: 

The  20th  day  of  November,  A.  D.  1908,  at  the  hour  of  10:45 
o'clock  a.  m.,  as  the  date  at  which  the  latest  receipt  and  distribu- 
tion of  said  acts  took  place  with  said  several  clerks  of  said  circuit 
courts,  and  declaring  said  distribution  of  said  acts  to  have  been  com- 
pleted at  said  hour  on  said  day,  and  proclaiming  all  such  laws  pub- 
lished and  circulated  in  the  several  counties  of  the  State  by  proper 
authority,  to  be  in  full  force  and  effect  from  and  after  the  hour 
of  10:45  o'clock  a.  m.,  the  20th  day  of  November,  A.  D.  1908. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused 
to  be  affixed  the  Great  Seal  of  the  State,  at  the  Capitol,  in  the  city 
of  Indianapolis,  this  23d  day  of  November,  in  the  year  of  our 
Lord,  1908 ;  in  the  year  of  the  Independence  of  the  United  States 
the  133d;  and  in  the  year  of  the  admission  of  the  State  of  Indi- 
ana the  92d. 

J.  FRANK  HANLY, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor: 

FRED  A.  SIMS, 

Secretary  of  State. 


416 


Special  Proclamations, 


REQUESTING    CONTRIBUTIONS    TO    SAN    FRANCISCO 
EARTHQUAKE  RELIEF  FUND. 


APRIL  20,  1906. 
To  the  People  of  Indiana  : 

A  calamity  so  appalling  and  awful  as  to  beggar  description  has 
befallen  the  prosperous  and  happy  people  of  a  sister  State.  The 
splendid  and  magnificent  city  of  San  Francisco  lies  in  ruins,  a 
charred  mass  of  smoldering  embers.  Men  and  women  who  yester- 
day were  possessed  of  affluence  and  wealth,  are  today  homeless  and 
in  want  of  bread,  and  little  children,  unused  to  exposure  or  want, 
are  shelterless  and  hungry.  These  stricken  people  are  our  people. 
They  are  bound  to  us  by  the  ties  of  commerce,  of  affection  and  of 
blood.  Except  as  we  share  their  misfortune,  we  have  not  been 
harmed  by  the  disaster  that  has  come  to  them.  We  are  rich  and 
able  to  give.  Let  us,  therefore,  make  willing,  generous  and  quick 
response,  remembering  that  in  giving  to  them  we  are  but  giving  to 
our  own,  and  arc  but  bearing  an  honorable  share  in  a  Nation's  con- 
tribution. 

J.  FRANK  HANLY, 
Governor  of  the  State  of  Indiana. 


TELEGRAM  SENT  TO  THE  GOVERNOR  OF  CALIFORNIA. 
INDIANAPOLIS,   INDIANA,   April   20,   1906. 

Hon.  Geo.  C.  Pardee,  Governor  of  the  State  of  California,  Sacramento,  Cali- 
fornia: 

In  the  name  of  the  people  of  Indiana,  I  send  you  and  your  stricken  peo- 
ple sincere  sympathy,  MIK!  beg  to  offer  every  material  assistance  within  the 
power  of  the  generous  citizen  of  this  Commonwealth. 

J.  FRANK  HANLY, 
Governor  of  the  State  of 


417 


REWARD  OFFERED  FOR  THE  ARREST  OF  OSCAR  A. 

BAKER. 


WHEREAS,  During  the  session  of  the  late  General  Assembly  of 
the  State  of  Indiana,  it  was  openly  alleged,  upon  the  floor  of  the 
House  of  Representatives,  that  one  Oscar  A.  Baker  had  attempted 
to  bribe  a  member  of  that  body  ;  and 

WHEREAS,  An  indictment  has  been  found  by  the  grand  jury 
of  Marion  County  and  returned  to  the  Criminal  Court  of  said 
county,  charging  said  Baker  with  said  offense;  and 

WHEREAS,  Said  Baker,  immediately  after  the  exposure  of  his 
said  offense  in  said  House  of  Representatives  and  before  he  could 
be  apprehended,  fled  the  State  of  Indiana  and  has  since  remained 
and  is  now  a  fugitive  from  justice;  and 

WHEREAS,  The  said  General  Assembly,  by  an  act  duly  passed 
and  approved  March  7,  1905,  made  an  appropriation  of  public 
funds  to  be  expended  under  the  direction  of  the  Governor,  for  the 
purpose  of  the  investigation,  apprehension,  arrest  and  prosecu- 
tion of  any  person  or  persons  charged  with  the  crime  of  bribery 
of  any  member,  officer  or  employe  of  said  General  Assembly ;  said 
appropriation  being  in  the  following  language: 

"For  the  use  of  the  State  of  Indiana,  to  be  expended  under  the  direction 
of  the  Governor,  the  sum  of  five  thousand  dollars  is  hereby  appropriated,  and 
the  same  or  so  much  thereof  as  may  be  necessary  is  made  available  for  the 
purpose  of  the  investigation,  apprehension,  arrest  and  prosecution  of  any 
person  or  persons  that  may  be  charged  with  the  crime  of  bribery  of  any 
member,  officer  or  employe  of  the  Sixty-Fourth  General  Assembly  of  the 
State  of  Indiana"; 

AND  WHEREAS,  The  said  Baker  is  still  unapprehended : 
Now,  Therefore,  I,  J.  Frank  Hanly,  Governor  of  the  State  of 
Indiana,  in  accordance  with  the  foregoing  facts  and  in  conformity 
writh  the  provisions  of  said  act  of  said  General  Assembly,  and  by 
virtue  of  the  authority  thereby  vested  in  me,  do  now  hereby  offer 
a  reward  of  Three  Thousand  Dollars  for  the  apprehension,  arrest 
and  return  of  said  Baker  to  the  custody  of  the  sheriff  of  Marion 
County,  in  the  State  of  Indiana.  Said  reward  to  be  paid  under 
and  pursuant  to  the  provisions  of  said  act  of  the  General  Assembly, 
to  any  person  or  persons,  upon  the  apprehension,  arrest  and  re- 
turn of  said  Baker  by  him  or  them  into  the  custody  of  said  sheriff 
as  an  officer  of  said  court.  The  said  reward  shall  be  and  is  in  lieu 

[27—19891] 


418 

of  any  and  all  other  rewards  offered  for  the  apprehension,  arrest 
and  return  of  said  Baker  by  or  to  any  officer  or  person. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused  to 
be  affixed  the  Great  Seal  of  the  State  of  Indiana,  at  the  Capitol  in 
the  city  of  Indianapolis,  this  5th  day  of  June,  in  the  year  of  our 
.Lord,  1906,  in  the  year  of  the  Independence  of  the  United  States 
the  130th,  and  in  the  year  of  the  admission  of  the  State  of  Indi- 
ana the  90th. 

J.  FRANK  HANLY, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor: 

FRED  A.  SIMS, 

Secretary  of  State. 


DESIGNATING  SITE  FOR  A  CAMP  OF  MILITARY  IN- 
STRUCTION FOR  THE  INDIANA  NATIONAL  GUARD. 


By  virtue  of  the  authority  vested  in  me  by  law,  I,  J.  Frank 
Hanly,  Governor  of  the  State  of  Indiana,  do  hereby  designate  the 
grounds  of  the  United  States  Military  Reservation,  known  as  Fort 
Benjamin  Harrison,  in  Marion  County,  Indiana,  as  a  site  for  a 
camp  of  military  instruction  for  the  Indiana  National  Guard,  from 
the  hour  of  twelve  o'clock,  noon,  instant,  until  the  fifteenth  day  of 
October,  1906. 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand  and 
caused  to  be  affixed  the  Great  Seal  of  the  State  of  Indiana,  at  the 
Capitol,  in  the  city  of  Indianapolis,  this  eighth  day  of  August,  in 
the  year  of  our  Lord,  1906,  in  the  year  of  the  Independence  of 
the  United  States  the  131st,  and  in  the  year  of  the  admission  of  the 
State  of  Indiana  the  90th. 

J.  FRANK  HANLY, 

[SEAL.]  Governor  of  Indiana. 

By  the  Governor: 

FRED  A.  SIMS, 

Secretary  of  State. 


419 
INDIANA  VILLAGE  FOR  EPILEPTICS. 


WHEREAS,  Section  12  of  an  act  "authorizing  and  providing  for 
the  establishment  and  organization  of  the  Indiana  Village  for  Epi- 
leptics," approved  March  6,  1905,  provides  that  "When  a  suffi- 
cient number  of  buildings  shall  have  been  completed  and  equipped 
for  the  admission  of  patients,  the  Governor  shall  be  advised  of  the 
fact,  and  shall  thereupon  issue  a  proclamation  to  that  effect" ;  and 

WHEREAS,  I  have  been  advised  by  the  Board  of  Trustees  of  the 
Indiana  Village  for  Epileptics  that  a  sufficient  number  of  build- 
ings have  been  completed  and  equipped  for  the  admission  of  pa- 
tients, and  that  the  same  are  now  ready  for  the  reception  of 
patients  as  provided  by  said  section  and  by  Section  1 1  of  said  act : 

Therefore,  I,  J.  Frank  Hanly,  by  virtue  of  the  authority  vested 
in  me  as  the  Governor  of  the  State  of  Indiana,  do  hereby  pro- 
claim said  Indiana  Village  for  Epileptics  to  be  sufficiently  com- 
pleted and  equipped  for  the  admission  of  patients,  and  the  same 
is  hereby  declared  open  to  the  admission  of  the  same,  according  to 
the  terms  and  provisions  of  said  act. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused 
to  be  affixed  the  Great  Seal  of  the  State  of  Indiana.  Done  at  the 
(\-ipitol,  in  the  city  of  Indianapolis,  this  19th  day  of  August,  in 
the  year  of  our  Lord,  1907,  in  the  year  of  the  Independence  of  the 
United  States  the  131st,  and  in  the  year  of  the  admission  of  the 
State  of  Indiana  the  91st. 

J.  FRANK  HANLY, 
Governor  of  the  State  of  Indiana. 

By  the  Governor: 

FRED  A.   SIMS, 

Secretary  of  State. 


420 

DECLARING  MARTIAL  LAW  IN  THE  CITY  OF  MUNCIE, 
DELAWARE  COUNTY,  INDIANA. 


WHEREAS,  There  has  existed  for  three  days  and  does  now  exist 
within  the  city  limits  of  Muncie,  Delaware  County,  State  of  Indi- 
ana, and  the  immediate  environments  thereof,  a  state  of  riot  and 
lawless  insurrection  against  the  laws  of  the  State  of  Indiana,  in- 
volving frequent  and  continuing  breaches  of  the  peace,  the  destruc- 
tion of  property  and  personal  injury  to  many  peaceable  and  law- 
abiding  citizens ;  and, 

WHEREAS,  For  said  period  there  has  existed  and  now  exists  in 
said  city  a  certain  class  of  individuals  who  have  been  and  are  dis- 
regarding the  laws  of  said  State,  and  are  offering  violence  to  prop- 
erty and  the  citizens  of  said  city  and  vicinity ;  and, 

WHEREAS,  There  have  been  and  are  upon  said  streets  lawless 
assemblages,  aided  by  and  under  the  direction  of  vicious  and  law- 
less persons;  and, 

WHEREAS,  From  time  to  time  within  said  period  property  has 
been  destroyed  and  citizens  assaulted ;  and, 

WHEREAS,  Threats,  intimidations  and  violence  are  daily  and 
frequently  resorted  to  by  said  lawless  class  of  individuals ;  and, 

WHEREAS,  The  civil  authorities  of  said  city  and  county,  by 
reason  of  such  lawlessness,  such  acts  of  violence  and  such  disturb- 
ances, have  been  and  are  unable  to  cope  with  or  control  conditions 
therein;  and, 

WHEREAS,  The  law-abiding  citizens  of  said  county,  assembled 
in  public  meeting,  have  passed  the  following  resolution  and  request : 

"Resolved,  That  on  account  of  the  exhausted  condition  of  the 
officials,  they  having  been  on  duty  for  several  days,  and  their  in- 
ability to  procure  more  help,  it  is  the  sense  of  this  meeting  that 
said  officials  are  not  able  to  cope  with  the  conditions  that  exist, 
and  that  the  Governor,  through  his  representative,  General  Perry, 
be  asked  to  bring  troops  here  tomorrow  morning  to  control  the 
situation,"  and, 

WHEREAS,  The  sheriff  of  said  county,  the  mayor  of  said  city 
and  the  superintendent  of  police  thereof  and  the  members  of  the 
Metropolitan  Police  Board  have  certified  to  me  the  following  state- 
ment of  fact  and  request : 

"In  view  of  the  fact  that  the- city  of  Muncie,  Delaware  County, 
State  of  Indiana,  is  threatened  with  mob  violence,  and  that  said 
city  has  for  three  days  been  in  a  state  of  riot  and  lawlessness,  and 


421 

the  Board  of  Metropolitan  Police  Commissioners  and  the  superin- 
tendent of  police  of  said  city,  and  the  sheriff  of  Delaware  County 
have  for  three  days  done  all  in  their  power  to  control  the  riotous 
element  and  restore  law  and  order  within  said  city,  said  officers  have 
reported  through  the  mayor  that  they  have  not  been  and  are  not 
now  and  will  not  be  able  to  prevent  further  unlawful  acts  of  law- 
lessness, and  restore  order  and  control  the  law-breaking  element, 
and  said  law-breaking  element  has  disregarded  the  proclamation 
of  the  mayor  of  said  city  to  desist  and  refrain  from  unlawful  acts 
injurious  to  life  and  property,  and  it  is  necessary  in  our  judgment 
that  the  state  militia  be  sent  to  said  city  to  restore  law  and  order, 
the  persons  whose  names  are  hereunto  affixed  respectfully  request 
that  you  send  to  said  city  the  state  militia  to  quell  and  suppress 
said  unlawful  acts  and  protect  life  and  property,"  and, 

WHEREAS,  The  Constitution  of  the  State  constitutes  the  Gov- 
ernor thereof  the  highest  executive  authority  therein,  and  provides 
that  "he  shall  take  care  that  the  laws  be  faithfully  executed" ; 

Now,  therefore,  I,  J.  Frank  Hanly,  Governor  of  the  State  of 
Indiana  and  commander-in-chief  of  the  military  forces  thereof,  by 
virtue  of  the  authority  vested  in  me  by  the  Constitution  of  said 
State,  do  hereby  proclaim  and  declare  said  city  and  its  immediate 
environments  to  be  in  a  state  of  riot  and  insurrection  against  the 
laws  of  the  Commonwealth,  and  do  hereby  proclaim  martial  law 
throughout  said  city  and  throughout  the  territory  adjacent  thereto 
and  within  a  distance  of  four  miles  from  the  Court  House  in  said 
city,  and  do  hereby  command  all  turbulent  and  disorderly  persons 
to  immediately  disperse  and  retire  peaceably  to  their  respective 
homes  and  hereafter  submit  themselves  to  the  lawfully  constituted 
authorities  of  said  county  and  city,  and  hereby  do  invoke  the  aid 
and  co-operation  of  all  good  citizens  of  said  county  and  city  to 
uphold  the  law  and  preserve  the  public  peace. 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand  as  Gov- 
ernor of  said  State  and  commander-in-chief  of  the  military  forces 
thereof,  and  caused  to  be  affixed  the  Great  Seal  of  the  State,  at  the 
Capitol,  in  the  city  of  Indianapolis,  on  this,  the  4th  day  of  Jan- 
uary, 1908. 

J.  FRANK  HANLY, 
Governor  of  the  State  of  Indiana  and 

Commander-in-chief  of  its  military  forces. 

By  the  Governor: 

FRED  A.  SIMS, 

Secretary  of  State. 


422 
ORDER  TO  GENERAL  McKEK. 


INDIANAPOLIS,  IND.,  January   4,  1908. 

To  Major-General   William  J.  McKec,  Commanding  Provisional 

Brigade,  Indiana  National  Guard: 

Sir — You  are  hereby  advised  that  I  have  this  day  issued  a 
proclamation  placing  the  city  of  Muncie  and  its  immediate  envi- 
ronment under  martial  law,  copy  of  which  proclamation  is  attached 
hereto  for  your  information  and  guidance. 

You  are  hereby  ordered  to  take  command  of  said  city  and  dis- 
trict, and  the  troops  now  there  assembled  or  which  shall  hereafter 
be  there  assembled,  for  the  purpose  of  carrying  out  the  intent  of 
said  proclamation,  subject  to  the  limitations  and  within  the  lines 
hereinafter  stated. 

I  am  sending  you  Hon.  Henry  M.  Bowling,  Assistant  Attor- 
ney-General of  the  State,  who  will  act  as  your  legal  adviser. 

All  civil  officers,  constables,  sheriffs,  marshals  and  other  police 
officers  shall  be  permitted  accustomed  and  necessary  arms.  No 
other  person  will  be  permitted  to  carry  dangerous  weapons  of  any 
kind, -either  concealed  or  unconcealed. 

The  persons  and  property  of  all  law-abiding  citizens  will  be 
protected. 

All  persons  who  have  heretofore  engaged  in  or  supported  the 
lawless  acts  against  persons  or  property,  or  who  have  given  aid 
and  comfort  to  the  persons  committing  any  of  such  acts,  who  shall 
return  to  peaceful  occupations  and  preserve  quiet  and  order,  hold- 
ing no  further  communications  of  any  kind  with  the  lawless  per- 
son or  persons,  will  not  be  disturbed  in  person  or  property  by  the 
military  forces,  except  where  the  exigencies  of  the  public  service 
may  render  it  necessary. 

All  rights  of  property  of  whatever  kind  will  be  held  inviolate, 
subject  to  law.  All  persons  in  the  district  are  required  to  pursue 
their  usual  avocations.  All  shops  and  places  of  business  (except 
those  hereinafter  mentioned)  are  to  be  kept  open  in  the  usual  m.-m- 
ner  as  in  time  of  peace. 

All  saloons  and  places  where  intoxicating  liquors  are  sold  at 
retail  as  a  beverage,  will  be  closed  and  kept  closed  until  further 
orders. 

Violations  of  State  and  Federal  law,  disorders  and  disturbances 
of  the  peace,  and  interference  with  the  military  forces,  will  be  re 


423 

ferrccl  to  a  proper  authority  for  trial  and  punishment.  Misde- 
meanors will  be  subject  to  the  civil  authority,  if  it  chooses  to  act. 
Civil  causes  will  await  the  ordinary,  tribunals. 

All  law-abiding  citizens  will  render  aid  in  restoring  civil  gov- 
ernment and  in  maintaining  the  peace. 

All  assemblages  of  persons  in  streets  or  highways,  either  by 
day  or  by  night,  tend  to  disorder,  and  are  forbidden.  Vagrancy 
and  loitering  upon  the  streets  will  not  be  tolerated. 

I  direct  that  martial  law  hereby  established  be  administered 
by  you  with  mildness  and  gentleness,  but  that  it  be  vigorously  done 
when  occasion  demands. 

You  will  call  to  your  aid  the  mayor  of  said  city,  the  sheriff  of 
Delaware  County  and  his  legally  constituted  deputies,  the  chief 
of  police  and  all  members  of  the  Metropolitan  Police  Board  and 
the  Metropolitan  Police  force,  and  insist  upon  their  counsel,  ad- 
vice and  active  co-operation,  making  such  use  of  them  and  of  their 
kindly  offices  as  in  the  exercise  of  sound  judgment  shall  seem  to  be 
necessary. 

You  will,  by  proclamation  or  otherwise,  acquaint  the  citizens 
of  said  city  and  district  with  the  scope  and  intent  of  this  order, 
and  your  purpose  to  act  thereunder. 

el.  FRANK  HANLY, 
Governor  of  the  State  of  Indiana,  and  Commander-in-Chief  of  its 

Military  Forces. 


424 


DECLARING  CORRECTIONAL  DEPARTMENT  OF  THE 
INDIANA  WOMEN'S  PRISON  OPEN  FOR  THE  RE- 
CEPTION OF  PERSONS  DULY  COM- 
MITTED THERETO. 


WHEREAS,  I  have  been  advised  by  the  Board  of  Trustees  of  the 
Indiana  Women's  Prison  that  the  correctional  department  of  said 
prison,  provided  for  by  an  act  of  the  General  Assembly,  approved 
March  9,  1907,  has  been  completed  and  is  now  ready  to  receive 
inmates. 

Therefore,  I,  J.  Frank  Hanly,  Governor  of  the  State  of  Indi- 
ana, by  virtue  of  the  authority  vested  in  me  by  said  act  of  the 
General  Assembly,  do  now  hereby  proclaim  said  correctional  de- 
partment of  said  Women's  Prison  to  be  open  for  the  reception  of 
all  persons  duly  committed  thereto  by  duly  constituted  authority 
under  the  provisions  of  said  act. 

Said  act  will  be  construed  by  the  Executive  Department  to 
provide  for  the  acceptance  of  only  such  persons  as  shall  be  duly 
committed  to  such  correctional  department  subsequent  to  the  date 
of  this  proclamation. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  as  Governor 
of  said  State,  and  caused  to  be  affixed  the  Great  Seal,  of  the  State, 
at  the  Capitol,  in  the  city  of  Indianapolis,  this  10th  day  of  Jan- 
uary, 1908. 

J.    FRANK   HANLY, 
Governor  of  the  State  of  Indiana. 

Attest:  FREDA.  SIMS, 

Secretary  of  State. 


ENDING  MARTIAL  LAW   IN   THE   CITY  OF   MUNCIE, 
DELAWARE  COUNTY,  INDIANA. 


WHEREAS,  Riot  and  lawless  insurrection  against  the  laws  of 
the  State  of  Indiana  in  the  city  of  Muncie  and  in  the  territory  de- 
fined in  the  executive  proclamation  declaring  martial  law  in  said 
city  and  district,  dated  the  4th  day  of  January,  1908,  have  ceased, 
and  peace  and  order  have  been  restored  to  said  city  and  district, 


now. 


Therefore,  I,  J.  Frank  Hanly,  Governor  of  the  State  of  In- 
diana and  commander-in-chief  of  the  military  forces  of  said  State, 


425 

by  virtue  of  the  authority  vested  in  me  by  the  constitution  of  said 
State,  do  hereby  declare  said  city  and  its  immediate  environment, 
as  defined  in  said  proclamation,  to  be  in  a  state  of  peace  and  tran- 
quility  and  martial  law  therein  to  be  at  an  end  from  this  date. 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand  as  Gov- 
ernor of  said  State  and  commander-in-chief  of  the  military  forces 
therein,  and  caused  to  be  affixed  the  great  seal  of  the  State,  at  the 
Capitol,  in  the  city  of  Indianapolis,  on  this  13th  day  of  January, 
1908. 

J.    FRANK    HANLY, 

Governor  of  the  State  of  Indiana,  and  Commander-in-Chief  of  its 
Military  Forces. 

By  the  Governor : 

FRED  A.  SIMS, 

Secretary  of  State. 

ORDER  TO  GENERAL  McKEE. 


Major-General  William  J.  McKee,  Commanding  Indiana  National 

Guard  : 

Sir — You  are  hereby  advised  that  I  have  this  day  issued  a  proc- 
lamation, as  Governor  of  the  State  of  Indiana  and  commander-in- 
chief  of  its  military  forces,  declaring  martial  law  at  an  end  in  the 
city  of  Muncie  and  throughout  the  district  defined  by  executive 
proclamation  of  the  4th  inst. 

You  are  hereby  ordered  to  turn  over  the  government  and  con- 
trol of  said  city  to  the  duly  constituted  civil  authorities  thereof, 
and  to  make  known  by  proclamation  or  otherwise  the  fact  that  mar- 
tial law  has  ceased  within  said  city  and  district. 

You  will,  however,  remain  in  said  city  with  such  troops  as  in 
your  judgment  will  be  necessary  for  the  purpose  of  assisting  the 
civil  authorities  in  maintaining  peace  and  order,  and  in  the  en- 
forcement of  the  law  throughout  said  city  and  said  district. 

You  will  advise  with  the  said  civil  authorities  from  time  to  time 
as  the  exigencies  of  the  case  may  require,  and  hold  the  troops  under 
your  command  in  readiness  to  render  every  necessary  assistance  to 
such  authorities  in  the  maintenance  of  peace  and  order,  and  the  en- 
forcement of  the  law,  until  in  your  judgment,  such  authorities  no 
longer  need  military  assistance. 

J.  FRANK  HANTA, 
Governor  of  the  State  of  Indiana,  and  Coiinuander-in-Cliief  of  i/.v 

Military  Forces. 
[28—19891] 


426 
DEATH  OF  GROVER  CLEVELAND. 


Grovcr  Cleveland,  twice  President  of  the  United  States,  is  dead. 
As  an  executive,  he  governed  wisely  and  strongly.  As  a  citizen  he 
loved  his  country  and  was  ever  loyal  to  his  conception  of  its  best 
and  highest  interests. 

In  deference  to  the  sentiment  of  all  the  people  of  this  Common- 
wealth, without  regard  to  party  affiliation,  and  in  respect  to  his 
memory,  to  the  exalted  office  be  held  and  the  great  public  service 
lu*  rendered,  I  hereby  direct  that  the  flag  on  the  Capitol  building 
be  lowered  to  half  mast  for  a  period  of  thirty  days  from  the  date 
of  his  death,  and  recommend  that  all  public  offices  of  the  State  be 
closed  on  the  day  of  his  funeral. 

Done  at  the  Capitol,  in  the  city  of  Indianapolis,  this  25th  day 
of  June,  in  the  year  of  our  Lord,  1908. 

J.  FRANK  HANLY, 
Governor  of  the  State  of  Indiana. 


BARRING  DISEASED  CATTLE  FROM  THE  STATE  OF 

INDIANA. 


WHEREAS,  Tuberculosis  among  cattle  in  the  several  States  of 
the  American  Union  is  becoming  prevalent,  the  percentage  in  some 
cases  being  quite  high,  and  no  area  being  entirely  free  from  the 
infection ;  and, 

WHEREAS,  Said  disease  is  increasing,  particularly  among  dairy 
cattle ;  and, 

WHEREAS,  Several  of  the  States  require  that  dairy  and  breed- 
ing cattle  be  free  from  tuberculosis  when  shipped  into  their  terri- 
tory for  dairy  or  breeding  purposes ;  and, 

WHEREAS,  Dairy  and  breeding  cattle  affected  by  said  disease 
are  being  shipped  into  the  State  of  Indiana,  and  in  some  instances 
where  persons  shipping  them  knew  they  were  so  affected ;  now, 

Therefore,  In  order  to  prevent  the  spread  of  said  disease,  I, 
J.  Frank  Hanly,  Governor  of  the  State  of  Indiana,  by  virtue  of 
the  authority  vested  in  me  by  the  laws  of  said  State,  do  hereby 
require  and  proclaim  that  all  cattle  brought  into  the  State  of  In- 
diana for  either  dairy  or  breeding  purposes  shall  be  accompanied 
by  a  certificate  from  the  authorities  of  the  State  from  which  they 
are  shipped,  showing  their  freedom  from  tuberculosis  and  other 


427 

contagious  diseases;  the  terms  of  said  certificate  to  be  such  as 
shall  he  required  and  prescribed  by  Ihe  State  Veterinarian  of  the 
said  State  of  Indiana. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused 
to  be  affixed  the  Great  Seal  of  the  State  of  Indiana,  at  the  Capitol, 
in  the  city  of  Indianapolis,  this  9th  day  of  July,  in  the  year  of  our 
Lord,  1908,  in  the  year  of  the  independence  of  the  United  States 
the  133d,  and  in  the  year  of  the  admission  of  the  State  of  Indiana 
the  92d. 

J.  FRANK  HANL.Y, 
Governor  of  the  State  of  Indiana. 
By  the  Governor: 

FRED  A.  SIMS, 

Secretary  of  State. 


CONVENING  THE  GENERAL  ASSEMBLY  OF  THE 
STATE  OF  INDIANA  IN  SPECIAL  SESSION. 


EXECUTIVE  DEPARTMENT  OF  THE  STATE  OF  INDIANA. 

The  Constitution  of  the  State  devolves  upon  the  Governor  the 
duty  of  calling  a  special  session  of  the  General  Assembly  whenever 
in  his  opinion  "the  public  welfare  shall  require  it." 

In  my  opinion  the  public  welfare  does  now  require  a  special 
session  of  the  General  Assembly  of  the  State  of  Indiana. 

Therefore,  I,  J.  Frank  Hanly,  by  virtue  of  the  authority  so 
conferred  upon  me  as  Governor  of  said  State,  do  hereby  call  upon 
the  General  Assembly  of  the  State  of  Indiana  to  convene  in  spe- 
cial session  on  Friday,  September  18,  A.  D.  1908,  at  the  hour  of 
10  o'clock  a.  m. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused 
to  be  affixed  the  Great  Seal  of  the  State  of  Indiana,  at  the  Capitol, 
in  the  city  of  Indianapolis,  this  4th  day  of  September,  in  the  year 
of  our  Lord  1908,  in  the  year  of  the  Independence  of  the  United 
States  the  133d,  and  in  the  year  of  the  admission  of  the  State  of 
Indiana  the  92d. 

J.  FRANK  HANLY, 
Governor  of  the  State  of  Indiana. 
B}^  the  Governor: 

FRED  A.  SIMS, 

Secretary  of  State. 


428 

KKASONS    FOR    CONVENING    GENERAL    ASSEMBLY    IN    SPECIAL    SESSION. 

The  Constitution  imposes  upon  the  Governor  the  duty  of  con- 
vening the  General  Assembly  in  special  session  whenever,  in  his 
opinion,  the  welfare  of  the  State  requires  it.  The  responsibility  of 
decision  rests  solely  with  the  Governor.  He  must  assume  it  alone. 
No  one  else  can  share  it.  It  is  indivisible. 

I  have  called  others  into  consultation,  most  of  whom,  I  am  frank 
to  say,  have  advised  against  the  calling  of  an  extra  session  at  this 
time,  but  I  have  not  been  impressed  with  their  reasoning.  They 
are  sincere,  but  they  are  not  able  to  view  the  matter  from  the  stand- 
point of  responsibility  occupied  by  the  Executive. 

In  my  opinion,  conditions  now  exist  which  necessitate  a  special 
session  of  the  Sixty-fifth  General  Assembly.  So  believing,  I  have 
issued  a  proclamation  calling  upon  it  to  assemble. 

The  condition  of  the  specific  appropriations  made  at  the  late 
session  of  the  General  Assembly  alone  necessitates  and  justifies  my 
action. 

Specific  appropriations  were  made  at  the  late  session  as  follows : 

Indiana  University — Power  plant,  $56,350 ;  stacks  and  equip- 
ment of  library,  $25,000;  addition  to  Maxwell  Hall,  $18,125. 

State  Normal  School— Library,  $99,970. 

Purdue  University — Agricultural  Experiment  Station  building, 
$100,000. 

State  Soldiers'  Home — Hospital,  $50,000  ;  remodeling  old  hos- 
pital, $15,000. 

Girls'  School — One  new  cottage,  $25,000. 

Southeastern  Hospital  for  the  Insane — Eighteen  buildings, 
equipment,  etc.,  $559,377.82. 

School  for  the  Deaf — Boys'  and  girls'  dormitories,  equipment, 
etc.,  $367,272. 

Anderson ville  Monument — $10,000. 

Lew  Wallace  Statue — $5,000. 

Vicksburg  Monument — $38,000. 

These  appropriations  became  available  on  the  first  day  of  Oc- 
tober of  last  year,  1907.  Ordinarily  they  would  have  remained 
available  for  at  least  two  years.  By  Section  5  of  the  act  of  1907, 
fixing  the  fiscal  year  and  providing  for  the  covering  of  unex- 
pended appropriations  into  the  general  fund  of  the  treasury,  it  is 
mad*  the  duty  of  the  Treasurer  of  State  "biennially,  at  the  end 
of  the  fiscal  year  immediately  preceding  each  regular  session  of 
the  General  Assembly,  to  cover  and  transfer  into  the  general  fund 


429 

of  the  treasury  the  unexpended  balances  of  all  specific  appropria- 
tion except  such  as  shall  have  been  made  available  beyond  said 
time  by  the  act  appropriating  the  same." 

CONDITION  IMPOSSIBLE  TO   MEET. 

Under  this  statute  all  balances  of  the  above  appropriations  un- 
expended on  the  30th  inst.  will  lapse.  The  fact  that  these  appro- 
priations were  not  available  until  the  1st  of  last  October  and  lapse 
on  the  30th  of  September  of  this  year  creates  a  condition  which 
it  has  been  physically  impossible  to  meet. 

The  following  unexpended  balances  of  these  several  appropria- 
tions will  lapse  unless  reappropriated : 

Purdue    University    $21,480  00 

State    Normal   School    87,096  29 

Girls'    School    -. 17,982  75 

School  for  the  Deaf 225,107  37 

Southeastern  Hospital  for  the  Insane   500,936  37 

Substantially  all  of  the  appropriations  for  the  Vicksburg  and 
Andersonville  monuments  and  the  Lew  Wallace  statue  are  unex- 
pended and  will  lapse. 

Many  of  these  buildings  are  well  under  way.  The  walls  of 
some  are  up.  Some  are  ready  for  roofing.  Roofs  are  on  others, 
but  the  interiors  are  unfinished.  Those  who  hold  contracts  for 
the  construction  of  these  buildings  have  proceeded  in  good  faith, 
believing  the  appropriation  made  could  be  had.  They  can  not 
proceed  with  the  buildings  without  payment  until  the  regular  ses- 
sion of  the  next  General  Assembly  in  January.  That  will  come  in 
midwinter.  I  can  not  consent  that  hundreds  of  thousands  of  dol- 
lars of  valuable  buildings  shall  stand  in  their  present  unfinished 
condition  until  next  year.  There  is  ample  money  in  the  treasury 
to  meet  all  these  obligations,  there  being  at  the  present  time  $896,- 
180.76  available,  with  the  November  revenues  yet  to  be  received. 

By  recent  legislation  the  Girls'  School  and  the  Women's  Prison 
were  separated,  the  school  removed  to  a  site  near  Clermont,  and  the 
Women's  Prison  remodeled  and  a  portion  of  the  building  converted 
into  a  workhouse  for  women.  The  cost  of  the  administration  of  the 
separate  institutions  has  been  of  necessity  greater  than  the  admin- 
istration of  the  single  institution.  The  appropriation  made  for  the 
maintenance  of  each  has  been  wholly  insufficient  to  meet  the  new 
conditions. 

I  have  paid  out  of  the  Governor's  emergency  contingent  fund, 
for  the  maintenance  of  the  Girl's  School,  up  to  Aug.  1,  $8,944.45. 


430 

August  and  September  bills  for  maintenance  are  yet  to  be  met.  Up 
to  September  1  I  have  paid  out  of  the  Governor's  Emergency  Con- 
tingent Fund,  for  maintenance  of  the  Women's  Prison,  $3,236.58, 
with  September  bills  for  maintenance  still  to  be  met.  The  appro- 
priation made  for  the  Boys'  School  was  last  year  insufficient  and  is 
again  insufficient  this  year.  Bills  for  maintenance  for  August  are 
submitted  to  me  unpaid,  aggregating  $3,153.65,  with  September 
bill  for  maintenance  still  to  be  met.  The  exigencies  of  the  other 
institutions  have  from  time  to  time  drawn  upon  the  emergency 
contingent  fund  during  the  fiscal  year  until  it  is  now  practically 
exhausted.  The  maintenance  appropriations  for  these  institutions, 
which  become  available  on  October  1 ,  can  not  be  used  under  the  law 
to  meet  the  unpaid  accounts  of  such  institutions  for  the  present 
fiscal  year.  There  has  not  been  extravagance  in  the  management 
of  these  three  institutions.  The  year  has  been  a  hard  one  in  all  the 
institutions.  Provisions  have  been  high.  In  most  cases  unusually 
so.  Gardens,  upon  which  some  of  them  depend  very  largely  for 
sustenance  during  the  summer,  because  of  the  intense  and  long- 
continued  drought,  have  been  wholly  inadequate  to  meet  their 
needs.  The  inmates  must  be  fed. 

NIGHT    RIDERS    CAUSE   ALARM. 

In  the  early  spring  numerous  raids  were  made  in  the  part  of 
the  State  bordering  upon  the  Ohio  River  by  so-called  "night 
riders,"  resulting  in  the  destruction  of  a  number  of  tobacco  beds 
where  young  plants  were  being  grown  preparatory  to  transplant- 
ing in  the  fields,  and  many  threatening  letters  written  warning 
tobacco  growers  of  personal  violence  and  burning  of  property.  I 
have  done  what  I  could,  under  the  limited  authority  conferred 
upon  the  Governor  by  law  and  with  the  meager  funds  in  my  hands, 
to  apprehend  these  persons  and  protect  the  persons  and  property 
of  citizens  in  that  section  of  the  State. 

In  a  few  weeks  the  tobacco  crop  will  be  cut  and  housed  in 
sheds  and  barns.  Many  threatening  letters  are  again  being  re- 
ceived warning,  tobacco  growers  not  to  cut  their  crops  at  peril 
of  the  destruction  of  crop  and  barns  by  fire.  The  conditions  in 
Kentucky  during  the  last  year,  one-third  of  the  State  being  in  an- 
archy, with  neither  life  nor  property  secure ;  the  conditions  along 
the  Ohio  River  in  Ohio,  where,  in  the  last  six  months,  the  State 
has  been  compelled  to  maintain  a  military  patrol  at  a  cost  of  $40,- 
000,  and  the  threats  now  being  made  to  repeat  these  crimes  in 
Indiana,  impel  me  to  the  action  I  have  taken,  in  the  hope  that  the 


431 

General  Assembly  will  give  such  executive  authority  and  place  such 
funds  at  executive  disposal  .as  shall  be  necessary  to  meet  what  may 
become  at  any  moment  a  grave  situation. 

The  protection  of  property  and  its  peaceful  enjoyment  and 
the  preservation  of  the  lives  of  its  citizens  are  among  the  primal 
reasons  for  the  maintenance  of  any  government.  I  can  not  con- 
sent that  the  Government  of  this  Commonwealth  shall  fail  in  this 
behalf. 

FAVORS  REPEAL  VINCENNES  BILL. 

At  the  late  General  Assembly  a  bill  providing  for  the  issuing 
of  $120,548  of  bonds  to  the  trustees  of  Vincennes  University  and 
creating  a  State  debt,  principal  and  interest,  of  more  than  $156,- 
000,  was  passed  and  presented  to  the  Executive  for  signature. 
After  the  most  painstaking  examination  of  all  the  facts  in  the  case 
I  became  thoroughly  convinced  that  the  claim  had  no  foundation 
either  legal  or  moral.  This  view  was  shared  by  both  the  preceding 
Governors.  I  vetoed  the  bill,  setting  out  fully  the  facts.  It  was 
passed  over  executive  veto.  The  bonds  were  prepared  and  pre- 
sented to  me  for  signature.  I  took  them  and  locked  them  up,  and 
refused  to  sign  them.  At  the  time  I  vetoed  this  measure  I  believed 
it  clearly  unconstitutional  and  pointed  out  its  invalidity.  My  judg- 
ment has  since  been  confirmed  by  the  legal  opinion  of  eminent  coun- 
sel, after  full  examination  of  the  question.  I  shall  ask  the  General 
Assembly  to  repeal  this  statute.  If  it  will  do  so  it  will  save  the 
State  enough  money  to  pay  the  expenses  of  the  session  four  times 
over. 

COUNTY  LOCAL  OPTION  URGED. 

Three  }^ears  and  a  half  ago  I  recommended  to  the  General  As- 
sembly, and  it  passed  a  law  giving  a  majority  of  the  legal  voters 
of  a  township  or  city  ward  the  right  to  remonstrate  against  the 
traffic  in  intoxicating  liquors  at  retail,  and  making  it  unlawful 
for  the  board  of  county  commissioners,  after  the  filing  of  such  a 
remonstrance,  to  grant  a  license  to  any  person  within  such  terri- 
tory for  a  period  of  two  years.  Under  this  law  830  townships  in 
Indiana  have  inhibited  this  traffic.  More  than  1,600,000  of  our 
people  live  in  this  territory.  Public  sentiment  has  been  created  in 
behalf  of  this  law  and  public  opinion  has  advanced  under  the  dem- 
onstration of  the  benefits  derived  from  the  inhibition  of  the  dram 
shop  in  these  communities  until,  today,  the  people  of  the  State 
would,  in  my  judgment,  overwhelmingly  favor  the  enactment  of  a 
county  local  option  law  that  shall  preserve  without  impairment  the 


432 

present   remonstrance  law   and  be  additional   and   supplementary 
thereto. 

Personally,  I  am  so  fully  persuaded  of  the  moral,  economic  and 
financial  value  of  such  legislation  that  I  shall  recommend  and 
earnestly  insist  upon  the  enactment  of  such  a  measure. 

J.  FRANK  HANLY, 

Governor. 


REQUESTING  CONTRIBUTIONS  TO  THE  ITALIAN 
EARTHQUAKE  RELIEF  FUND. 


The  story  of  an  earthquake  disaster,  widespread  and  far-reach- 
ing, involving  hundreds  of  thousands  of  men,  women  and  children, 
in  the  distant  Island  of  Sicily,  comes  to  us  with  such  authenticity 
and  with  such  detail  of  death,  of  suffering,  and  of  want,  as  to 
touch  the  hearts  of  men  the  world  around. 

The  need  is  so  urgent  and  so  great  that  the  people  of  Italy 
can  not  meet  it  alone.  They  must  have  the  assistance  of  all  peoples. 
The  emergency  is  such  that  I  hereby  proclaim  their  need,  and  call 
upon  the  people  of  Indiana  to  contribute  to  a  fund  for  the  relief 
of  the  stricken  but  surviving  inhabitants  of  the  unfortunate  Island, 
and  ask  them  to  act  quickly  and  generously.  That  the  funds  con- 
tributed may  be  effectively  handled  and  promptly  forwarded,  I  rec- 
ommend that  they  be  sent  to  the  Indiana  Red  Cross  Society,  In- 
dianapolis, Indiana,  in  care  of  the  Treasurer  of  said  Society,  Mr. 
James  W.  Lilly,  Indianapolis,  Indiana. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  caused 
to  be  affixed  the  Great  Seal  of  the  State  of  Indiana,  at  the  City  of 
Indianapolis,  this  4th  day  of  January,  in  the  year  of  our  Lord, 
1909,  in  the  year  of  the  Independence  of  the  United  States  the 
133d,  and  of  the  admission  of  the  State  of  Indiana  the  93d. 

J.    FRANK    HANLY, 
Governor  of  the  State  of  Indiana. 
By  the  Governor: 

FRED  A.  SIMS, 

Secretary  of  State. 


Miscellaneous 


(435) 


435 
EXECUTIVE  ORDER. 


IN     THE    MATTER    OF    THE    INVESTIGATION     OF    THE     OFFICE    OF    THE 
AUDITOR    OF    STATE. 

I,  J.  Frank  Hanly,  Governor  of  the  State  of  Indiana,  do  now 
find  that  an  emergency  exists  for  an  examination  of  the  office  of 
Auditor  of  State  during  the  term  of  David  E.  Sherrick,  late  Au- 
ditor of  State,  from  January  26,  1908,  to  September  14,  1905, 
and  that  the  same  shall  be  conducted  under  executive  authority. 
Said  emergency  exists  on  account  of  the  defalcation  of  said  David 
E.  Sherrick,  and  the  unknown  condition  of  the  fiscal  and  insur- 
ance affairs  of  said  office  under  his  control  during  said  term. 

Therefore,  I  do  hereby  designate  and  appoint  James  W.  Noel, 
of  the  city  of  Indianapolis,  and  William  B.  Durborow,  of  the  town 
of  Williamsport,  Indiana,  to  make  such  examination  and  investi- 
gation under  the  terms  and  authority  of  the  following  order  of 
appointment  this  day  issued  to  them : 

To  Hon.  James  W.  Xocl  and  Hon.  William  B.  Durborow: 
Gentlemen : 

WHEREAS,  David  E.  Sherrick,  late  Auditor  of  State  of  the 
State  of  Indiana,  by  his  own  confession  in  writing  made  to  me  as 
Governor  of  the  State  of  Indiana,  has  diverted  to  his  own  use  the 
sum  of  $145,000  of  the  funds  of  the  State  coming  into  his  hands 
as  such  Auditor;  and 

WHEREAS,  The  said  David  E.  Sherrick  did,  at  my  request,  re- 
sign his  office  on  account  thereof  on  the  14th  day  of  September, 
1905;  and, 

WHEREAS,  On  account  of  the  magnitude  of  the  business  trans- 
acted by  said  Sherrick  as  such  Auditor,  and  the  important  and 
vital  relations  such  office  has  writh  all  the  fiscal  affairs  of  the  State 
and  the  several  county  governments,  and  its  relation  to  and  con- 
trol over  the  insurance  companies  doing  business  in  the  State,  and 
the  banks,  savings  institutions,  trust  companies  and  building  and 
loan  associations  doing  business  in  the  State,  it  is  essential  that  the 
exact  condition  of  said  office  and  of  its  several  departments  during 
the  term  of  said  Auditor  and  his  acts  in  connection  therewith  be 
ascertained  and  be  made  known  in  some  authoritative  manner; 
and, 

WHEREAS,  An  emergency  exists,  because  of  said  conditions, 
which  requires  all  the  affairs  of  such  office  and  of  its  several  de- 


4:56 

jmrtinents  from  January  26,  190.3,  to  September  14,  1905,  to  be 
rxumined  and  investigated  under  executive  authority. 

I  do  now  hereby  select  and  appoint  you  to  perform  that  duty 
in  connection  with  Hon.  Warren  Bigler,  the  present  Auditor  of 
the  State  of  Indiana,  who  will  join  you  in  your  labors  and  in  your 
report. 

You  will,  therefore,  proceed  at  -once  to  make  such  examination 
of  said  office  and  of  each  of  its  several  departments.  You  may 
meet  upon  your  own  adjournment,  if  you  do  not  thereby  unneces- 
sarily delay  said  examination  and  investigation  and  the  report  of 
your  proceedings  and  findings  relative  thereto. 

You  will  include  in  your  investigation  and  report  all  the  busi- 
ness of  such  office  for  such  time,  including  methods  of  keeping  the 
books  and  conducting  the  affairs  of  said  office,  the  finances  thereof, 
the  sufficiency  and  solvency  of  such  securities  there  on  deposit,  ,«is 
are  required  by  law,  the  dealings  of  the  office  with  the  State  treas- 
ury, and  the  correct  statement  of  the  balance  due  from  said  David 
E.  Sherrick  as  such  Auditor  to  the  State  of  Indiana  on  account  of 
moneys  belonging  to  said  State  and  received  by  him  for  whatever 
purpose  during  his  said  term,  at  the  time  he  retired  from  said 
office  on  the  14th  day  of  September,  1905. 

In  connection  with  your  said  examination  and  investigation, 
you  may  take  the  evidence  of  such  parties,  under  oath,  as  you 
may  think  necessary  and  may  be  able  to  induce  to  appear  before 
you,  and  such  evidence  as  you  may  take  and  such  information  as 
you  may  obtain  you  will  not  make  public  except  in  your  report 
to  me. 

You  will  pursue  your  investigation  and  make  examination  of 
said  office  and  its  several  departments  uninfluenced  by  fear,  favor 
or  affection,  and  without  any  purpose  to  shield  any  person  or 
party  6r  to  advance  the  interests  of  any  person  or  party,  to  the 
end  that  the  whole  truth  touching  the  affairs  of  said  office  for  said 
term  may  appear  in  your  report ;  that  the  guilty  be  exposed  and 
the  innocent  vindicated. 

The  Auditor  of  State  and  the  Treasurer  of  State  are  directed 
to  furnish  you  every  aid  and  facility  in  the  making  of  said  inves- 
tigation and  examination  of  said  office. 

Should  clerical  or  other  aid  become  necessary  to  the  successful 
prosecution  of  your  labors,  you  will  report  that  fact  to  me,  and  the 
necessary  assistance  will  be  provided. 

If ,  m  your  investigation,  legal  questions  arise  about  which  you 
may  wish  to  be  advised,  you  will  submit  them  to  me  in  writing  and 


437 

I   will   furnish   you  with  the   opinion    of    the    Attorney-General 
thereon. 

Your  compensation  is  hereby  fixed  at  twenty-five  dollars,  each, 
per  day,  each  of  you  to  bear  your  own  personal  expenses  while 
engaged  in  such  service. 

When  your  services  arc  concluded,  you  will  make  report  in 
writing,  under  oath,  and  file  the  same  with  me.  You  are  also  di- 
rected to  prepare  and  file,  separately  from  your  report  of  the  facts 
found  touching  the  conditions  of  said  office,  such  recommendations 
as  may  occur  to  you  and  seem  advisable  to  make  concerning  the 
methods  in  vogue  in  such  office,  and  needed  legislation  touching 
said  office,  if  necessary.  Your  report  of  facts  will  be  required  to 
contain  a  full  account  of  the  finances  of  the  office  during  said 
term ;  also,  such  evidence  as  you  shall  take,  together  with  any 
finding  of  facts  you  may  make  which  shall  be  based  upon  such 
evidence. 

Witness  my  hand  and  the  Great  Seal  of  the  State  of  Indiana. 
Done  at  the  Capitol  in  the  city  of  Indianapolis,  this  24th  day  of 
October,  in  the  year  of  our  Lord,  1905,  in  the  year  of  the  Inde- 
pendence of  the  United  States  the  130th,  and  in  the  year  of  the 
admission  of  the  State  of  Indiana  the  89th. 

J.  FRANK  HANLY, 
[SEAL.]  Governor  of  the  State  of  Indiana. 


EXECUTIVE  DECISION 


IX    Till:    MATTER    OF    THE    APPLICATION    FOR    THE    PARDON    OF    DAVID 
E.    SHERRICK,    AND    REASONS    THEREFOR. 

APRIL  7,  1906. 

Petitions  signed  by  several  thousand  citizens  of  the  State,  re- 
questing the  pardon  of  David  E.  Sherrick,  late  Auditor  of  State, 
have  been  filed  in  the  executive  office  and  have  been  presented  for 
executive  consideration  and  action. 

Mr.  Sherrick  4s  in  the  State  Prison  under  sentence  of  the  Crim- 
inal Court  of  Marion  County,  for  embezzlement  of  the  funds  of 
tile  State  coming  into  his  hands  while  Auditor  of  State.  An  appeal 
from  the  judgment  of  the  trial  court  to  the  Supreme  Court  of  the 
State  has  b(.jeri  prayed  and  granted.  The  cause  is,  therefore,  still 
pending  in  the  courts.  Most  of  these  petitions  were  formally  pre- 


438 

sen  ted  to  me  on  the  2d  inst,  by  Mr.  Smiley  N.  Chambers,  Mr.  John 
H.  Conner,  Mr.  William  D.  Cooper,  and  the  Rev.  D.  R.  Lucas. 

While  the  petitions  themselves  ask  for  the  pardon  of  Mr.  Sher- 
nVk,  the  gentlemen  who  presented  them  did  not  do  so.  They  made 
"no  other  recommendation  than  to  ask  that  Mr.  Sherrick  be  paroled 
until  such  time  as  his  case  might  be  determined  by  the  Supreme 
Court." 

The  petitions  are  said  to  contain  21,000  signatures,  more  than 
1 1 ,000  of  which  are  said  to  be  the  signatures  of  citizens  of  the  city 
of  Indianapolis.  The  large  number  of  signatures  has  been  urged 
upon  my  consideration  as  an  evidence  that  the  people  of  the  State 
desire  favorable  executive  action  in  this  case.  It  has  been  also  urged 
that  executive  clemency  ought  to  be  extended  in  response  to  "this 
general  sentiment  of  the  community." 

In  giving  consideration  to  these  petitions  as  an  index  or  evi- 
dence of  public  opinion,  it  is  well  to  recall  the  facts  and  circum- 
stances under  which  they  were  circulated  and  signed.  It  is  com- 
mon knowledge  that  they  were  circulated  simultaneously  in  almost 
every  section  of  the  State  and  the  signatures  obtained  by  an  or- 
ganized, systematic  and  well-directed  campaign,  and  at  a  time  and 
in  a  manner  best  calculated  to  appeal  to  the  sympathy  of  those  to 
whom  they  were  presented.  They  were  circulated  and  most  of  the 
signatures  obtained  in  the  interval  between  the  return  of  the  ver- 
dict of  the  jury  and  the  ruling  of  the  Court  upon  the  motion  for  a 
new  trial,  and  before  sentence  was  pronounced.  In  fact,  quite  a 
number  of  them  were  on  file  in  the  executive  office  before  the  judg- 
ment of  the  Court  was  rendered.  Many  persons  to  whom  they 
were  presented  did  not  know  the  facts  of  the  case,  and.  would  not 
have  signed  them  had  they  been  conversant  with  the  facts.  That 
this  is  true  is  evidenced  by  personal  statements  made  to  me  by  many 
persons  who  signed  them,  and  by  letters  received  from  the  several 
communities  in  the  State  where  they  were  circulated.  The  answers 
to  the  questions  propounded  to  the  gentlemen  who  presented  the 
petitions,  disclose  the  fact  that  even  some  of  these  gentlemen  did 
not  know  the  facts.  Others  to  whom  the  petitions  were  presented, 
signed  them  upon  impulse  and  without  consideration  either  of  the 
facts,  of  the  attendant  circumstances,  or  of  the  importance  of  the 
issue  involved  in  the  action  requested. 

It  is  well  also  to  remember  in  this  connection  that  the  defend- 
ant was  until  recently  the  incumbent  of  a  high  office  and  that  he 
possessed  a  wide  acquaintance  throughout  the  State.  The  fact 
that  less  than  10,000  persons  outside  of  the  city  of  Indianapolis 


489 

signed  the  petitions,  in  view  of  the  campaign  and  the  extraordinary 
effort  made  to  secure  signatures,  and  of  the  facts  and  circum- 
stances surrounding  the  case,  is  strong  evidence  that  the  great 
mass  of  the  people  of  the  State  are  not  in  sympathy  with  the 
purpose  of  the  petitions  and  do  not  desire  favorable  executive  ac- 
tion thereon.  Many  hundreds  of  letters  have  been  received  at  the 
executive  office  from  points  throughout  the  State,  and  from  per- 
sons of  high  standing  and  character,  urging  me  to  refuse  the 
prayer  of  the  petitions.  These  letters  are  not  prompted  by  im- 
pulse, nor  are  they  the  result  of  an  organized  or  well-directed 
campaign.  They  are  the  voluntary  expressions  of  thoughtful  men 
who  appreciate  the  great  public  interests  involved  in  the  case,  and 
are  a  much  surer  and  safer  index  of  the  sober,  thoughtful  and  en- 
during sentiment  of  the  masses  of  the  people  than  these  petitions 
are. 

The  power  to  pardon  is  an  executive  function  and  under  the 
constitution  belongs  exclusive!}7  to  the  Chief  Executive  of  the 
State.  It  is  a  high  power,  and  is  to  be  exercised  with  great  care. 
It  was  vested  in  the  Governor  because  of  the  great  responsibility  of 
the  office,  and  in  the  belief  that  it  would  be  used  only  upon  mature 
deliberation,  and  never  from  impulse  or  caprice.  It  was  not  in- 
tended that  it  should  be  exercised  in  any  case  merely  in  response 
to  what,  for  the  moment,  might  appear  to  be  public  sentiment.  The 
man  who  happens  to  be,  for  the  time,  vested  with  this  power,  has 
no  right,  either  legal  or  moral,  to  use  it  in  a  personal  way.  He 
may  not  use  it  to  save  his  friend,  nor  may  he  refuse  to  use  it  be- 
cause his  enemy  would  be  the  beneficiary  of  its  use.  It  is  vested 
in  him  for  public  purposes  alone. 

Where  the  guilt  of  the  beneficiary  of  the  exercise  of  such 
power  is  clear  and  without  palliating  fact  or  circumstance,  public 
opinion,  however  strong  it  might  be,  would  not  be  a  sufficient  jus- 
tification for  its  exercise,  and  this  is  especially  true  where  the  crime 
is  great  and  involves  grave  public  interests  affecting  the  adminis- 
tration of  affairs  of  state.  The  crime  of  which  Mr.  Sherrick  has 
been  adjudged  guilty  is  a  grave  one.  It  strikes  directly  at  the 
administration  of  public  affairs.  It  involves  the  betrayal  of  pub- 
lic confidence,  and  is,  therefore,  doubly  dangerous  to  the  State. 
If  it  were  conceded  that  a  widespread  sentiment  favorable  to  the 
exercise  of  the  pardoning  power  exists  in  the  present  case,  that 
does  not  of  itself  justify  the  use  of  such  power,  unless  there  is  sub- 
stantial doubt  of  Mr.  Sherrick's  guilt,  or  some  palliating  circum- 
stance or  fact  of  controlling  importance. 


440 

No  such  doubt  exists,  ,-ind  no  palliating  fact  or  circumstance 
is  called  to  my  attention  cither  by  the  petitions  themselves  or  by 
the  words  of  those  who  presented  them  to  me.  The  only  basis  for 
executive  clemency  offered  in  the  petitions  is  found  in  the  following 
paragraph : 

"David  E.  Sherrick  is  a  victim  of  circumstances  and  a  practice  followed 
by  practically  all  state,  county  and  township  officers  within  our  State  for 
fifty  years  past,  however  vicious  such  practice  may  have  been,  rather  than  any 
deliberate  criminal  intent  upon  his  part." 

There  is  in  this  statement  one  fundamental  defect.  It  is  not 
true.  One  of  the  gentlemen  who  presented  the  petition  to  me,  in- 
formed me  in  the  course  of  his  remarks  on  the  occasion  of  the  pre- 
sentation of  the  petitions,  that  he  had  refused  to  sign  them  because 
they  contained  this  statement  and  because  the  statement  was  false. 
He  himself  had  been  a  State  officer.  He  knew  he  had  not  been 
guilty  of  such  crime  as  that  of  which  Mr.  Sherrick  was  convicted. 
He  could  not  sign  the  petition  without  indicting  himself,  and  he 
therefore  declined  to  do  so.  This  statement,  since  it  contains  the 
only  facts  mentioned  in  the  petitions  upon  which  executive  clemency 
can  be  predicated,  challenges  consideration  and  analysis.  If  it 
is  not  true,  then  no  basis  for  favorable  executive  action  is 
offered  by  the  petitions.  While  it  is  well  known  that  Mr. 
Sherrick  was  convicted  of  the  crime  of  official  embezzlement, 
the  facts  of  his  embezzlement  have  been  so  often  misstated  as 
to  deceive  the  general  public.  It  has  been  said  that  his  crime  was 
a  technical  one ;  that  he  did  no  more  than  loan  the  public  funds 
coming  into  his  hands  and  appropriate  the  interest,  and  that  all 
public  officers — state,  county,  township  and  municipal — have  done 
the  same  thing  for  many  years.  The  statement  in  the  petitions 
quoted  above  is  predicated  upon  this  contention,  but  the  conten- 
tion is  absolutely  without  foundation  either  of  fact  or  circum- 
stance. For  these  reasons  it  is  important  that  some  official  public 
statement  be  made  of  the  facts  as  they  actually  are.  In  what  I  am 
about  to  say,  I  do  not  speak  from  the  record  in  the  trial  of  the 
cause.  I  do  not  have  that  before  me,  but  I  do  speak  within  the 
purview  of  the  indictment  upon  which  Mr.  Sherrick  was  convicted, 
and  within  the  facts  of  the  case;  facts,  too,  which  are  without 
dispute,  and  which  cannot  be  successfully  disputed.  When  the 
Supreme  Court  reviews  the  record  of  a  cause  on  appeal,  it  is  bound 
by  the  record.  It  cannot  go  beyond  it.  But  this  rule  does  not 
apply  to  a  case  when  it  reaches  the  Governor  upon  an  application 


441 

for  executive  clemency.  It  is  the  duty  of  the  Governor  to  con- 
sider all  the  facts  in  the  case  of  which  he  has  or  may  obtain  any 
knowledge.  He  may  consider  the  guilt  or  innocence  of  the  appli- 
cant. He  may  consider  the  character  of  the  crime  itself,  with  all 
its  attendant  circumstances ;  the  effect  it  has  had,  or  the  effect  its 
repetition  may  have  upon  society,  and  the  administration  of  public 
affairs.  He  may  consider  the  fairness  of  the  trial,  and  the  charac- 
ter of  the  defense  made,  if  any.  He  may  consider  any  new  evidence 
discovered  after  the  trial,  which  goes  to  the  question  of  the  guilt 
or  the  innocence  of  the  applicant.  He  may  consider  the  habits, 
character  and  the  past  life  of  the  applicant.  All  these  things  are 
proper  subjects  of  consideration  in  the  exercise  of  the  high  power 
of  executive  clemency. 

Mr.  Sherrick  entered  upon  the  duties  of  the  office  of  Auditor 
of  State  in  the  month  of  January,  1903.  He  was  without  property 
and  without  other  income  than  his  official  salary.  This  salary  is 
fixed  by  law  at  $7,500  per  annum.  He  was  indebted  at  the  time  in 
the  sum  of  $20,000.  Immediately  upon  coming  into  office  he  took 
$20,000  of  the  public  moneys  coming  into  his  hands,  with  which 
to  pay  his  personal  indebtedness.  Within  four  months  after  his  in- 
duction into  office,  he  visited  French  Lick  Springs,  where  he  lost 
in  less  than  thirty  days,  more  than  $9,900  of  money  in  gambling. 
At  that  time  he  had  received  but  one  quarter's  salary.  Other  than 
that,  he  had  no  money  of  his  own.  His  gambling  debts  at  French 
Lick  were  paid  by  checks  drawn  upon  banks  where  the  public  funds 
in  his  care  were  deposited,  and  they  were  paid  by  these  banks  out 
of  the  public  funds.  From  that  day  to  the  day  of  his  resignation, 
he  was  a  defaulter  to  the  extent  of  many  thousands  of  dollars.  The 
use  of  the  public  funds  in  the  payment  of  his  individual  debts  was 
not  "loaning  the  funds  and  using  the  interest  accruing  thereon," 
as  it  is  charged  other  public  officials  have  done.  It  was  a  criminal 
conversion  of  these  funds  to  his  own  use.  It  was  embezzlement. 
The  use  of  more  than  $9,900  of  public  funds,  and  their  loss  at  the 
gaming  table,  was  not  "the  loaning  of  the  funds."  It  was  the 
conversion  of  them  to  his  own  use  in  an  unlawful  and  criminal  busi- 
ness. It  was  embezzlement.  Under  the  law  as  construed  by  him, 
himself,  it  was  his  duty  to  make  semi-annual  reports  to  the  Treas- 
urer of  State,  in  January  and  July,  of  the  fees  and  moneys  com- 
ing into  his  hands  as  Auditor  of  State,  and  thereupon  to  pay  to 
the  Treasurer  of  State  all  such  fees  and  moneys.  By  far  the 
greater  portion  of  the  money  coming  into  his  hands  each  annual 
period,  was  paid  to  him  in  the  months  of  January  and  July  of  the 
[29—19891] 


442 

respective  settlement  periods.     When  the  first  semi-annual  settle- 
ment period  came,  Mr.  Sherrick  did  not  have  the  funds  on  hands 
with  which  to  make  settlement.     He  did  not  have  these  funds,  not 
because  he  had  loaned  them,  but  because  he  had  used  $20,000  of 
them  to  pay  his  own  individual  debts,  and  had  lost  $10,000  of  such 
funds  in  gambling.     His  report  was  therefore  delayed  until  the 
23d  day  of  July,  and  the  moneys  coming  into  his  hands  for  this, 
the  first  month  of  the  new  semi-annual  settlement  period,  were  used 
to  make  up  the  shortage  occasioned  by  his  embezzlement  of  the 
funds  coming  into  his  hands  during  the  first  semi-annual  settle- 
ment period,  and  to  enable  him  to  make  the  settlement  required  by 
law.     But  that  was  not  payment  to  the  State.     On  the  contrary,  it 
was  an  affirmative,  deliberate  act  of  official  malfeasance,  resorted 
to  for  the  purpose  of  concealing  and  covering  up  his  embezzlement 
of  the  public  moneys  coming  into  his  hands  during  the  preceding 
semi-annual  settlement  period.     It  was  in  no  sense  an  accounting, 
to  the  State  for  the  money  he  had  received  during  the  time  covered 
by  his  report.    The  use  of  the  State's  money  coming  into  his  hands 
during  the  first  month  of  the  second  semi-annual  settlement  period 
to  make  good  the  defalcation  occurring  during  the  first  semi-an- 
nual settlement  period,  did  not  change  in  any  way  his  position  or 
his  relation  to  the  State.     He  was  still  a  defaulter.     The  second 
semi-annual  settlement,  due  in  January,   1904,  was  delayed  until 
February  4,  1904,  and  delayed  to  enable  him  to  use  the  funds  com- 
ing into  his  hands  during  the  month  of  January  to  meet  an  in- 
creased defalcation  in  the  second  semi-annual   settlement  period. 
His  third  semi-annual  settlement  was   delayed   for  a  like  reason 
until  August  1,  1904;   his  fourth  until  January  31,  1905,  and  his 
fifth  until  August  26,  1905.     This  last  settlement  was  made  in 
answer  to  the  imperative,  persistent  and  oft-repeated  demand  of 
the  Governor  of  the  State,  and  to  make  it  he  used  $144,141.49 
of  the  money  coming  into  his  hands  after  his  settlement  was  due. 

In  each  of  these  semi-annual  reports  and  settlements,  the  law 
required  him  to  account  for  and  pay  over  to  the  Treasurer  of 
State  all  fees  and  moneys  coming  into  his  hands  and  for  whatever 
purpose  received.  These  reports  were  required  to  be  verified.  Prior 
to  his  resignation  he  made  five  reports.  In  that  time  (that  is,  from 
the  month  of  January,  1903,  to  September  14,  1905),  he  collected 
miscellaneous  fees  in  the  sum  of  $6,978.07,  which  he  sequestered, 
converted  to  his  own  use  and  omitted  from  his  reports.  Of  most 
of  these  fees  no  public  record  whatever  was  kept,  and  not  a  dollar 
of  them  was  reported  or  paid  to  the  Treasurer  while  Mr.  Sherrick 


443 

was  in  office.  When  he  resigned,  his  total  defalcation,  exclusive  of 
interest,  amounted  to  $151,119.56.  His  defalcation  did  not  grow 
less,  but  on  the  contrary,  it  constantly  increased. 

In  addition  to  the  money  used  in  riotous  living  and  lost  at  the 
gaining  table,  he  invested  the  public  funds  in  mining  stocks,  in 
oil  well  stocks,  and  in  other  speculative  securities,  which  were  bear- 
ing no  interest,  and  from  which  he  had  no  right  to  expect  any 
substantial  return  during  his  term  of  office.  These  facts  conclu- 
sively prove,  and  none  of  them  are  the  subject  of  dispute,  that  Mr. 
Sherrick  is  guilty  of  something  more  than  a  technical  violation 
of  the  law.  They  demonstrate  beyond  doubt  that  he  systematically 
and  constantly  from  the  day  of  his  induction  into  office  until  the 
day  of  his  resignation,  converted  to  his  own  use,  squandered,  gam- 
bled away  and  embezzled  the  public  funds.  And  it  is,  therefore, 
not  true  that  he  is  the  victim  of  "a  practice  followed  by  practically 
all  state,  county  and  township  officers  within  our  State  for  fifty 
years  past."  Indeed,  there  is  not  even  a  semblance  of  truth  in  such 
a  statement.  Many  of  those  who  have  urged  this  false  statement 
of  fact  with  most  vehemence  and  have  made  loudest  outcry  about 
it  have  known  its  falsity  from  the  beginning.  Others  have  been 
imposed  upon  and  have  used  it  innocently,  but  have  thereby  con- 
tributed to  the  deception  of  the  public. 

It  is  quite  proper,  in  considering  this  application  for  executive 
clemency,  to  inquire  how  Mr.  Sherrick  administered  the  other  af- 
fairs of  his  office.  In  the  month  of  December,  1904,  previous  to 
the  convening  of  the  General  Assembly  in  January,  1905,  Mr. 
Sherrick,  as  Auditor  of  State,  addressed  a  letter  to  the  officials  of 
certain  railway  companies  doing  business  in  the  State  of  Indiana, 
asking  them  to  forward  to  him  for  distribution  among  the  mem- 
bers of  the  General  Assembly,  all  railroad  passes  which  such  com- 
panies intended  for  the  use  of  members  of  the  General  Assembly, 
stating  that  he  had  some  prospective  legislation  of  personal  con- 
cern to  himself,  and  that  he  would  see  to  it  that  the  interests  of 
the  companies  were  cared  for  along  with  his  own.  In  many  in- 
stances this  was  done,  and  the  office  of  the  Auditor  of  State  be- 
came for  weeks  a  broker's  office  for  the  distribution  of  free  rail- 
way transportation  to  members  of  the  General  Assembly. 

At  the  meeting  of  the  Board  of  State  Tax  Commissioners,  held 
in  July  and  August  of  1905,  the  question  of  the  valuation,  for  the 
purpose  of  assessment,  of  the  Monon  Railway,  came  before  the 
members  of  the  Board  for  their  consideration  in  executive  session. 
Some  of  the  members  of  the  Board  believed  the  existing  valuation 


444 

of  the  road  to  In-  too  low,  and  desired  that  the  valuation  should  be 
raised.  Mr.  Sherrick  very  vigorously  opposed  any  increase  in  the 
valuation.  He  supported  his  position  with  such  poor  logic  and 
reason  as  to  excite  remark.  After  the  adjournment  of  the  Board, 
and  in  the  presence  of  the  members  of  the  Board,  he  was  asked  by 
the  Governor  for  an  explanation  of  his  conduct.  He  said  that  his 
act  was  due  to  the  fact  that  an  attorney,  then  residing  in  Chicago, 
who  was  his  warm  personal  friend,  and  to  whom  he  was  under  many 
obligations,  had  requested  him  to  keep  the  valuation  of  the  Monon 
Railway  Company  where  it  then  was  as  a  personal  favor  to  him, 
and  had  said  that  if  such  valuation  could  be  kept  without  increase, 
that  he,  the  Chicago  attorney,  would  be  able  to  get  permanent 
employment  as  counsel  for  said  railway  company. 

Those  are  only  two  instances  of  many  that  could  be  cited  where 
the  official  conduct  of  Mr.  Sherrick  was  such  as  to  deserve  the  con- 
demnation of  every  honest  citizen  of  the  State,  and,  taken  in  con- 
nection with  his  systematic,  studied  and  long-continued  embezzle- 
ment of  the  public  funds,  they  are  such  as  to  preclude  absolutely 
executive  clemency. 

I  am  compelled  to  believe  that  many  men  who  signed  the  peti- 
tions on  file  in  this  case  would  have  refused  to  do  so  had  they  known 
all  the  facts  connected  with  Mr.  Sherrick's  administration  of  his 
office. 

It  is  said  in  the  petitions  that  Mr.  Sherrick  was  the  victim  of 
circumstances.  If  so,  they  were  circumstances  of  his  own  making. 
The  system  of  loaning  the  public  funds  for  the  individual  profit 
of  public  officers,  which  has  grown  up  in  Indiana,  is  not  responsible 
in  any  substantial  degree  for  Mr.  Sherrick's  crime.  There  was 
nothing  in  this  system,  however  devotedly  he  might  have  followed 
it,  which  compelled  him  to  take  public  funds  to  pay  his  private 
debts,  or  to  take  public  funds  for  investment  in  speculative  mining 
stocks,  or  to  hazard  public  funds  at  the  gambling  table.  The  sys- 
tem referred  to  is  bad  enough ;  •  so  bad,  in  fact,  as  to  be  a  reproach 
to  an  honest  people  such  as  ours,  and  it  will  have  sins  enough  to 
answer  for  without  charging  it  with  the  crimes  of  Mr.  Sherrick. 
A  bad  system  rarely,  if  ever,  destroys  an  honest  man,  or  one  fifc 
to  be  clothed  with  the  responsibility  of  high  office.  If  Mr.  Sherrick 
had  been  looking  for  precedent,  he  could  easily  have  found  one  in 
the  record  made  by  his  immediate  predecessor,  whose  reports  were 
made  on  the  day  the  law  required,  and  who  paid,  without  the  delay 
of  an  hour  at  each  of  the  semi-annual  settlements,  every  dollar  of 
the  moneys  of  the  State  he  had  collected.  It  is  apparent  from  the 


445 

facts  in  the  case  that  Mr.  Sherrick  was  not  searching  for  precedent. 
On  the  contrary,  he  was  engaged  in  blazing  a  new  way — a  path  at 
the  end  of  which  shame  and  disgrace  inevitably  lay. 

It  has  been  said  that  he  intended  no  wrong,  and  that  he  had  no 
criminal  intent,  but  no  impartial  and  fair-minded  man  can  read 
the  record  of  his  acts  and  believe  such  a  statement.  How  can  it  be 
said  he  intended  no  wrong  when  he  took  public  funds  with  which 
to  pay  his  private  debts  ?  How  can  it  be  said  he  intended  no  wrong 
when  he  took  public  funds  and  invested  tl^em  in  speculative  securi- 
ties from  which  he  had  no  right  to  expect  a  return  within  his  term 
of  office?  How  can  it  be  said  he  intended  no  wrong  when  he  took 
thousands  of  dollars  of  the  public  money  and  gambled  it  away,  or 
when  he  expended  other  thousands  of  such  funds  in  riotous  living? 

A  man  must  be  held  to  intend  the  reasonable  and  probable 
results  of  his  acts,  and  he  may  not,  after  having  committed  great 
crimes  for  a  long  period  of  time,  escape  punishment  upon  the  plea 
that  he  intended  no  wrong  in  the  commission  of  them. 

It  was  suggested  by  those  who  presented  these  petitions  that 
Mr.  Sherrick  and  his  friends  have  made  good  his  defalcation,  prin- 
cipal and  interest,  and  that  this  fact  should  be  considered  as  a 
palliating  circumstance.  This  statement  also  deserves  considera- 
tion. It  has  the  same  fundamental  defect  as  the  statement  hereto- 
fore quoted — it  is  not  true.  The  defalcation  has  been  made  good 
and  the  State  has  lost  no  money,  but  the  credit  for  this  is  not  due 
either,  to  Mr.  Sherrick  or  his  friends.  When  Mr.  Sherrick  resigned 
his  office,  certain  securities  were  turned  over  by  Mr.  Reed,  a  deputy 
in  his  office,  to  the  Governor  of  the  State,  and  afterward  placed 
in  the  hands  of  Mr.  Reed  as  Receiver  in  the  suit  upon  Mr.  Sher- 
rick's  official  bond.  These  securities  consisted  of  a  few  promissory 
notes  and  a  number  of  speculative  mining  stocks,  in  which  Mr. 
Sherrick  had  invested  the  public  funds.  Information  came  to  the 
Governor  and  to  the  Attorney-General  of  the  State,  which  dis- 
closed the  fact  that  the  State's  funds  had  been  invested  in  these 
securities  and  that  they  had  been  used  to  pay  Mr.  Sherrick's  private 
obligations;  that  the  men  who  received  them  knew  them  to  be 
State  funds  when  they  so  received  them  and  so  applied  them. 
Under  these  facts  and  the  law  of  the  land,  the  title  to  the  money 
was  not  divested,  it  still  remained  in  the  State,  and  the  State  had 
the  right  to  follow  and  recover  its  funds.  The  Attorney-General 
was  instructed  by  the  Governor  to  require  the  persons  who  had 
thus  received  the  moneys  of  the  State  to  return  it  to  the  State, 
and  to  proceed  to  do  so  without  fear  or  favor.  This  the  Attorney- 


446 

General  did,  and,  in  case  after  case,  the  persons  who  had  received 
these  funds  paid  them  back  because  they  were  compelled  to  do  so  to 
escape  prosecution.  Two  banks  which  had  received  the  public 
funds  in  satisfaction  of  a  personal  indebtedness  due  to  them  from 
.Mr.  Sherrick,  paid  back  $25,000.  A  number  of  other  persons 
from  whom  mining  and  other  stocks  had  been  purchased,  returned 
the  money  they  had  received,  and  took  back  their  stocks.  W.  S. 
Wickard  and  the  Murray  Lumber  Company  had  received  a  large 
stun  of  the  State's  monoy,  ostensibly  as  a  loan,  amounting  in  the 
aggregate  to  more  than  $50,000.  The  greater  portion  of  this 
money  was  used  by  Mr.  Wickard  to  take  up  his  notes,  upon  which 
Mr.  Sherrick  was  security,  in  a  certain  bank  in  the  city  of  Indi- 
anapolis. The  bank  knew  when  it  received  these  funds  that  it  was 
receiving  public  funds.  The  Attorney-General  was  directed  to 
prepare,  and  he  did  prepare,  a  complaint  to  which  he  made  the 
bank  a  party,  and  in  which  he  charged  these  facts.  A  copy  of  it 
was  served  upon  the  officers  of  the  bank,  and  they  were  informed 
that  it  would  be  filed  the  next  day  at  the  hour  of  two  o'clock  unless 
the  money  of  the  State  was  returned  to  it.  This  money  was  re- 
turned within  forty-eight  hours.  More  than  three-fourths  of  the 
defalcation  was  made  good  through  collections  made  by  the  Attor- 
ney-General in  the  manner  stated  above.  Therefore,  it  is  not  true 
that  either  Mr.  Sherrick  or  his  friends  made  good  bis  defalcation. 

{"5 

The  zeal,  the  ability  and  the  courage  and  integrity  of  the  Attor- 
ney-General, acting  under  the  direction  of  the  Governor,  alone 
saved  the  State  from  loss.  After  all  this  was  done,  there  was  still 
a  shortage  of  something  like  $25,000  or  $30,000.  Of  this  sum,  the 
surety  of  Mr.  Sherrick's  official  bond  paid  $6,000.  The  balance 
was  raised  by  the  friends  of  Mr.  Sherrick.  The  sum  thus  raised- 
some  $25,000  or  $30,000 — represents  substantially  the  amount  of 
the  public  funds  which  Mr.  Sherrick  had  gambled  away  in  two 
years  and  a  half,  and  lost  in  midnight  orgies,  or  in  other  criminal 
practices.  And,  in  the  face  of  these  facts,  I  am  asked  to  extend 
him  executive  clemency,  on  the  ground  that  he  intended  no  wrong 
and  had  no  criminal  intent. 

It  has  been  urged  that  executive  clemency  should  be  extended 
to  him,  at  least  to  the  extent  of  a  parole,  because  of  the  high  posi- 
tion he  held,  because  of  his  prominence  in  public  affairs,  and  be- 
cause of  the  shame  and  disgrace  that  would  come  to  him  through 
the  execution  of  the  sentence  pronounced  by  the  court.  Sitting  as 
the  Governor  of  the  State  he  has  so  deeply  wronged,  this  plea  does 
not  appeal  to  me.  The  fact  that  he  held  high  position,  that  he  was 


447 

prominent  in  affairs,  and  that  he  had  great  opportunity  to  serve 
the  people  whose  commission  he  had  obtained  and  whose  confidence 
he  held,  does  but  aggravate  his  crime  and  magnify  his  offense. 

It  is  said  that  the  law  has  been  vindicated  by  the  conviction  and 
sentence  of  Mr.  Sherrick,  and  that  the  execution  of  the  judgment 
ought  to  be  suspended  or  stayed.  If  this  be  true  in  the  present 
case,  there  is  no  reason  why  it  could  not  be  said  or  why  it  would 
not  be  true  in  every  case.  Conviction  and  sentence  do  not  vindicate 
the  law.  Without  the  execution  of  the  law's  judgment,  conviction 
and  sentence  would  be  a  sham.  They  would  not  deter  infractions 
of  the  law ;  they  would  not  protect  society.  Few  of  the  persons 
who  signed  these  petitions  would  believe  in  or  would  be  willing  to 
defend  this  doctrine  if  it  were  applied  to  cases  of  robbery,  child 
stealing,  burglary,  entering  a  house  to  commit  a  felony,  obtaining 
money  by  false  pretense,  counterfeiting  or  manslaughter.  And 
yet  the  penalty  in  each  of  these  cases  is  less  than  the  penalty  im- 
posed for  the  crime  of  which  Mr.  Sherrick  is  guilty.  In  each  of 
the  cases  named  the  maximum  punishment  is  fourteen  years.  In 
official  embezzlement  it  is  twenty-one  years.  Therefore,  it  must 
be  held  that  official  embezzlement  is,  in  the  eyes  of  the  law,  a  graver 
crime  than  any  of  the  offenses  named.  How,  then,  can  it  be  said 
that  the  law  is  not  vindicated  by  verdict  and  sentence  in  such  -cases, 
but  is  vindicated  in  the  graver  and  more  far-reaching  offense?  The 
position  is  not  tenable.  This  case  more  profoundly  concerns  the 
public  welfare  than  any  of  the  cases  named,  and  the  law  is  not 
vindicated  until  its  sentence  has  been  executed.  The  minimum  pun- 
ishment is  two  years.  The  maximum  punishment  is  twenty-one 
years.  It  may  be  that  executive  clemency  may  be  properly  exer- 
cised somewhere  between  these  periods.  That  I  do  not  now  decide. 

The  law — the  law  of  Indiana — is  made  for  all  men,  for  the  rich 
and  the  poor,  the  great  and  the  small,  the  prominent  and  the  ob- 
scure, and,  in  so  far  as  I  have  a  voice  in  its  administration,  it  shall 
fall  upon  all  men  alike,  while  I  am  Governor,  without  regard  to  who 
they  are,  or  what  position  they  hold  or  may  have  held.  The  man 
in  the  lowly  walks  of  life  is  required  to  abide  by  the  law.  He  may 
never  have  had  a  fair  chance  or  opportunity  in  life ;  he  may  be  a 
waif  upon  the  street;  he  may  know  little  of  his  relation  to  his 
fellows,  of  his  duty  to  society,  or  to  the  State ;  he  may  be  hungry 
and  cold,  but  if  he  breaks  the  law  and  does  but  take  only  so  much 
of  another  man's  property  as  to  satisfy  his  hunger,  or  to  protect 
him  from  the  cold,  he  is  made  to  feel  the  weight  of  the  law  he  has 
broken.  To  obtain  his  pardon  no  campaign  is  organized.  As  to 


448 

him  the  law  is  left  to  take  its  course.  I  see  no  reason  why  a  differ- 
ent rule  should  obtain  where  the  man  who  infracts  the  law  holds 
high  position  or  is  the  child  of  great  opportunities. 

As  an  individual  my  heart  is  heavy  with  grief  that  Mr.  Sher- 
rick betrayed  the  trust  confided  to  him  by  a  generous  people,  and 
is  guilty  of  the  crimes  of  which  he  has  been  tried,  convicted  and 
sentenced.  I  am  grieved  beyond  measure  that  the  circumstances 
and  facts  of  the  case  do  not  permit  executive  clemency.  If  this 
were  a  personal  matter,  Mr.  Sherrick  should  go  free  now.  But  it  is 
not.  Decision  in  this  case  is  not  the  act  of  an  individual,  it  belongs 
to  the  office,  it  is  the  act  of  the  Governor  of  the  State.  I  am  com- 
pelled to  eliminate  from  my  mind  all  questions  of  friendship,  of 
party  ties,  of  public  sentiment,  or  of  personal  sympathy,  and  to 
decide  the  question  upon  its  merits  alone,  with  a  view  only  to  the 
public  good,  to  the  welfare  of  society  and  of  the  State,  and  to  the 
maintenance  of  a  proper  standard  of  administration  of  public 
affairs.  Viewed  in  this  light,  and  in  the  light  of  the  undisputed 
facts  and  circumstances  of  the  case ;  my  oath  of  office,  the  law  and 
my  official  duty  coerce  me  into  the  denial  of  the  application.  I 
believe  Mr.  Sherrick  had  a  fair  trial.  The  facts  were  and  are  with- 
out dispute.  The  jury  could  not  have  done  less  under  their  oaths 
than  they  did.  The  case  is  still  pending  in  the  courts.  If  error 
of  law  has  been  committed,  it  will,  no  doubt,  be  corrected.  But  even 
though  error  of  law  shall  be  found  to  have  intervened  in  the  trial 
of  the  cause,  the  fact  will  remain  unchallenged  and  unchallengeable, 
unchanged  and  unchangeable,  that  Mr.  Sherrick  is  guilty  of  one  of 
the  gravest  crimes  known  to  the  law.  The  application  is  therefore 
denied. 

J.  FRANK  HANLY, 
Governor  of  the  State  of  Indiana. 


449 


APPOINTMENT  OF  A  COMMISSION  TO  INVESTIGATE 

AND  REPORT  CONDITIONS  AND  NEEDS  OF  THE 

PEOPLE    OF   FONTANET,    AFTER   THE 

POWDER-MILL  EXPLOSION. 


OCTOBER  18,  1907. 

There  is  need  of  assistance  at  Fontanet.  The  people  of  the 
State  ought  to  make  quick  and  adequate  response.  The  DuPont 
Powder  Company  has  placed  $5,000  in  my  hands  for  distribution 
and  as  a  basis  for  a  relief  fund.  I  have  appointed  Messrs.  W.  C. 
Van  Arsdel,  Hilton  U.  Brown,  of  the  Indianapolis  News,  and 
B.  F.  Lawrence,  of  the  Indianapolis  Star,  as  a  commission  to  take 
charge  of  the  distribution  of  this  fund.  These  gentlemen  have 
gone  to  Fontanet  to  ascertain  exact  conditions.  They  will  report 
to  me  cither  this  evening  or  in  the  morning  and  will  then  be  able 
to  give  the  people  of  the  State  definite  and  accurate  information  as 
to  the  necessities  and  the  extent  of  their  obligation  in  this  saddest 
of  all  calamities. 

I  have  urged  upon  the  DuPont  Powder  Company  the  duty  of 
repairing  injured  and  replacing  destroyed  houses  at  the  company's 
expense.  This,  they  have  undertaken,  at  least  to  some  extent, 
and  by  morning  I  will  be  advised  definitely  as  to  the  exact  extent  of 
relief  the  company  will  give  in  this  direction. 

I  hope  contributions  to  the  fund  already  started  will  not  be 
delayed,  but  that  they  will  be  begun  at  once.  The  people  whose 
houses  were  destroyed  at  Fontanet  are  poor  people.  In  many 
instances  all  they  had  in  the  world  was  invested  in  their  little  homes. 
These  have  been  utterly  destroyed.  In  other  instances,  the  bread- 
winners of  families  are  dead.  The  survivors  are  destitute.  The 
duty  of  a  rich,  generous  and  Christian  people  in  such  an  emergency 
is  too  clear  for  comment.  At  such  a  time  he  who  gives  quickly  gives 
twice. 

J.   FRANK  HANI,Y, 
Governor  of  the  State  of  Indiana. 


450 

KEMAKKS  BY  GOVERNOR  HANLY  AT  THE  INAUGURA- 
TION OF  GOVERNOR  MARSHALL. 


JANUARY  11,  1909. 

Four  years  and  three  days  ago  I  stood  here  in  your  presence 
and  took  upon  myself  an  obligation  to  support  the  Constitution 
of  this  Commonwealth  and  to  faithfully  discharge  the  duties  of 
the  high  office  of  Governor.  Through  the  vicissitudes  of  a  full  con- 
stitutional term  I  have  kept  that  oath  as  best  I  could.  How  well 
I  have  kept  it  I  leave  to  posterity  to  decide.  This  much,  however, 
I  claim  for  myself :  My  purpose  has  been  pure ;  my  effort  sincere ; 
my  zeal  untiring.  I  have  sought  only  the  public  good — the  welfare 
of  the  many.  I  have  not  finished  the  work  you  gave  me  to  do,  but 
I  have  fought  a  good  fight.  I  have  not  obtained  all  I  sought  or 
all  you  desired,  but  I  have  not  quailed  in  battle  nor  run  away  from 
any  duty  seen  and  understood.  My  heart  has  not  been  divided.  I 
have  held  no  commission  but  yours.  I  have  had  no  master  but  my 
conscience.  I  would  have  served  you  better  if  I  could. 

And  now  within  the  hour  I  shall  cease  to  have  to  do  officially 
with  public  affairs,  perhaps  forever.  The  obligation  I  then  took 
passes  even  now  to  another.  A  moment  and  I  shall  be  free.  Grate- 
ful forever  to  you  for  the  opportunity  of  service  the  great  office 
brought,  I  am  glad  to  lay  it  down  and  seek  opportunity  for  further 
service  in  humbler  sphere.  I  go  contented  and  happy.  Private  life 
has  no  terrors  for  me.  But  the  welfare  of  the  State — the  happi- 
ness of  her  people — can  never  while  I  live  be  without  interest  to  me, 
and  from  my  place  in  the  ranks  I  shall  not  cease  to  speak  and  write 
and  fight  for  her  and  for  them. 

He  whom  you  are  about  to  clothe  with  authority  to  administer 
the  government  for  the  next  four  years  is  here  ready  to  take  the 
oath  of  office  and  assume  the  responsibilities  of  the  position. 
Though  differing  in  political  faith  and  affiliation  from  him,  I 
bespeak  for  him  your  sincere  and  loyal  support  in  the  discharge  of 
the  grave  duties  of  the  great  office  upon  which  he  is  about  to  enter. 
I  shall  support  him  in  all  things  where  differing  convictions  of 
fundamental  principles  and  policies  do  not  separate  us.  He  will 
be  the  Governor  of  my  State,  and  I  shall  uphold  his  hands  in  every 
effort  he  makes  in  behalf  of  the  people  and  the  public  welfare. 

Mr.  Justice  Roby  of  the  Appellate  Court  will  now  administer  to 
the  Governor-elect  the  oath  of  office  prescribed  by  the  Constitution. 

(Justice  Roby  here  administered  the  oath.) 

Ladies  and  Gentlemen :    The  Governor  of  the  State  of  Indiana ! 


INDEX. 


PAGE. 

INAUGURAL    ADDRESS    5 

MESSAGES— 

Babcock    Insurance    Bill    184 

Binder  Twine  Plant ITS 

Charges  made  by  Luther  W.  Knisely   207 

Fairbanks,  Senator  Charles  W.,  resignation  of 171 

Flood  in  Southern  Indiana   177 

Gemmer,  Fred  L.,  appointment  as  Secretary   177 

Hunt,  Union  B.,  appointment  as  Secretary   171 

McCoy,  Ella  B.,  appointment  of 172 

"Night  Rider"  situation  in  Indiana   201 

Senate  Enrolled  Act  No.  248,  returning 197 

To  the  64th  General  Assembly  « 5,  172 

To  the  65th  General  Assembly  ' 28 

To  the  65th  General  Assembly,  Special  Session  109 

To  the  66th  General  Assembly    122 

Van  Arsdel,  Wrn.  C.,  appointment  of 171 

MISCELLANEOUS— 

Fontanet  Explosion   449 

Inaugural  of  Governor  Marshall  450 

Investigating  Committee    435 

Sherrick  Decision 437 

PARDONS,  ETC. 106,  163 

PROCLAMATIONS— 

Acts  of  General  Assembly  in  force 412 

Arbor  Day 387 

Baker,  O.  A.,  Reward  for  return  of 417 

Camp  of  Military  Instruction    418 

Cleveland,  Death  of  Ex-President 426 

Convening  Special  Session  of  General  Assembly 427 

Diseased  Cattle   426 

Earthquake 416,  432 

Labor  Day   399 

Martial  Law  at  Muncie  420,  424 

Memorial  Day  392 

Thanksgiving  Day 404 

Village  for  Epileptics  419 

Women's  Prison    424 

VETO  MESSAGES— 

Agricultural  schools 367 

Banks — assessment  of  316 

(451) 


452 

\  KTO  MESSAGES— Continued. 

Board  of  Safety,  City  of  Indianapolis     ron.prns.itioii  of 330 

( 'liild  desertion 367 

City  and  county  allowances — publication  of   245 

City  of  Indianapolis   

Civil  cases,  etc. — proceedings  in 237 

Civil  causes— new  trial  in   368 

Coal  mining  383 

Court  expenses,  Spencer  County — unpaid  265 

Court  Houses,  etc. — construction  of 285 

Council  Members,  City  of  Indianapolis — compensation  of 315 

Defective  title 282,  300 

Feed  stuff 326 

Fees  of  county  clerks  377 

Fees  of  county  sheriffs     370 

Gas  and  oil  wells  375 

Gas  and  oil  well  leases  and  options 362 

Gravel  road  proceeding  in  Orange  County 217 

Gravel  road,  Lake  and  Porter  counties 373 

Gravel  road  taxes,  Lake  County 374 

Gravel  roads — Location  and  construction  of 236 

Gravel  roads  on  township  lines  289 

.  Highways — j  urisdiction  of , 362 

Lakes— level  of  269 

Levees  and  dykes 367 

levies  for  hospitals  294 

Libraries — circulating    372 

Library  privileges — extension  of 278 

Life  insurance  bill   302 

.   Life  insurance  companies 376 

Loan  and  trust  companies 325 

Medicine,  etc. — practice  of   - 317 

Merchandise — sales  of 270 

Metropolitan  police  law — repeal  of   336 

Michigan  road  lands   264 

Mortgage  exemptions    378 

Plats— vacation  of  375 

Pleading  and  practice— matters  .of 229 

Printing  account  of  G.  A.  R .  '. 248 

Property  of  municipalities— assessment  of 335 

Public  offenses    393 

Railroads— authorization  of  construction  of 370 

Railroad  flag   stations    , 360 

Railroad  grade  crossings — elevation  of  235 

Real  estate  encumbered  by  mortgage 332 

Relief  of  H.  J.  Hostettler,  Trustee,  Lagrange  County 220 

Relief  of  William  Watters,  Treasurer,  Lagrange  County 228 

Relief  of  George  Willenar,  Treasurer,  Steuben  County. 262 

Relief  of  Ex-Trustees  of  Dekalb  County  * 255  , 

Relief  of  Ex-Trustees  of  Jasper  County   263 


YF/IO  MESSAGES— Continued.  PAGE. 

Sewers  and  drains   308 

School  cities — government  of   379 

School  city  or  corporation  bonds 296 

School  sites— purchase  of    372 

Soldiers — preference  of  for  appointment 211 

Spite  fences 215 

Street  improvements,  etc 235 

Submerged  lands — title  to   323 

Surety  companies   243 

Tax  levy   act — amending- 377 

Tax  liens  on  real  'estate 301 

Taxes  on  omitted  property 371 

Teachers'  State  licenses   369 

Trustees  of  savings  banks — compensation  of 315 

Veteran  Volunteer  Firemen's  Associations — compensation  of  members .  313 

Venue — change  of  in  city  courts 239 

Venue — change  of  from  police  j  udge   366 

Vincennes  University  bonds   344 

Voluntary  associations   298 

Water  mains  in  cities — extension  of 283 

Water  supply — protection  of   374 

Young  Men's  Christian  Association  incorporations   321 


YC  35979 


M214740 


f  17 


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